Annual Report 2024 © IMDEX Limited 2024 imdex.com 2 IMDEX Annual Report 2024 Our purpose as a leading global mining-tech company is to efficiently and sustainably unlock the earth’s value. We are uniquely positioned to enable customers to find, define and mine orebodies with precision, confidence and at speed. IMDEX Annual Report 2024 2 3 IMDEX Annual Report 2024 A strong core business with a clear objective to outperform industry market conditions Opportunities to strengthen core business via leading technologies and integrated IMDEX solutions New business growth via Digital and IMDEX Mining Technologies business units A strong financial platform with quality revenue and resilient earnings Disciplined cost control and strong cash generation Established global presence and customer network Market leading technologies with unique defendable IP A commitment to targeted R&D to maintain technical leadership Integrated solutions that are applicable across the mining value chain The ability to make acquisitions or collaborate with industry partners to complement existing product offering An experienced and diverse leadership team with world-class geoscience capabilities A low carbon footprint and opportunities to enhance the sustainability of operations for customers Why We Deliver 4 IMDEX Annual Report 2024 This Annual Report provides a summary of Imdex Limited’s operations and financial performance for the 2024 financial year (FY24) from 1 July 2023 to 30 June 2024. This report may contain forward looking statements. Further information can be found on page 85 of this report. IMDEX BLASTDOG™ Questions or feedback regarding our Company are always welcome. Please contact Kym Clements - IMDEX Investor Relations at kym.clements@imdexlimited.com Our Corporate Governance Statement discloses the extent to which we have complied with the Australian Securities Exchange Corporate Governance Council’s ‘Corporate Governance Principles & Recommendations – 4th edition’. Unless otherwise stated, references to ‘IMDEX’, the ‘Group’, the ‘Company’, ‘we’, ‘us’ and ‘our’ refer to Imdex Limited and its controlled entities. References to a year are to the financial year ended 30 June and references to dollar figures are in AUD currency. Download a copy of our FY24 Annual Report or past reports View Corporate Governance here About This Report Forward Looking Statements Further Information 5 IMDEX Annual Report 2024 5 IMDEX Annual Report 2024 6 IMDEX Annual Report 2024 Contents Business Overview About IMDEX Financial Highlights Strategic Highlights ESG Highlights Chairman’s Address Board of Directors MD & CEO Review of Operations Executive Leadership Committee 9 12 14 15 16 20 22 30 Financial Performance Financial Summary Revenue Growth EBITDA Disciplined R&D Capital Allocation Disciplined Capital Management Strong Balance Sheet 34 35 38 39 41 42 Operating Environment and Outlook Growth Strategy and FY25 Focus Areas Directors’ Report FY24 Operating Environment FY25 Focus Areas Growth Strategy 44 45 46 48 130 131 132 134 134 134 135 Financial Statements Shareholder Information Corporate Information Top 20 Largest Shareholders Key Announcements Annual General Meeting Corporate Calendar Share Registry Enquiries Company History Forward Looking Statements 137 © IMDEX Limited 2024 Remuneration Report 56 76 Find. Define. Mine. 8 IMDEX Annual Report 2024 About IMDEX IMDEX is a leading global mining-tech company that enables drilling contractors and resource companies to find, mine and define orebodies with precision, confidence and at speed. Our integrated solutions include a broad range of drilling optimisation products, rock knowledge sensors and real-time data and analytics. This offering is commodity agnostic and can be applied across the mining value chain. Our four corporate values underpin our actions and help guide our decision making. Our rich global experience and diverse thinking drives all development within IMDEX. It enables us to solve unique problems for global customers reducing environmental and social impacts to shape a better global industry. We reduce the environmental impact of our activities to shape a better global industry. We embrace flexible thinking for the benefit of our people, customers and the societies in which we operate. We serve our customers globally by leveraging our diverse teams and enabling inclusive decision making. We connect our expertise to customers to add values. We believe in shaping the future of mining through the relentless pursuit of technologies and services that question the status quo, address our customers’ challenges and set new benchmarks for what can be achieved in our industry. We listen to our people and customers to develop new technologies. We step up and challenge the status quo. We give our people the space to be curious and create. We are informed by industry trends to be open to new ideas. We are passionate about creating positive customer experiences that deliver successful outcomes for our customers now and into the future. We achieve this by working in partnership with our customers, actively listening to their needs and delivering genuine value through efficient solutions. We optimise our customers’ experience. We place our customers’ needs first and foremost, delivering on our promises. We encourage customer ownership and involvement. We create value for our customers through collaboration and innovation. We are a global team of diverse and talented people, who empower each other to be our best selves. We harness our strengths by combining our knowledge across boundaries in a positive and accountable workplace. We hold each other accountable and take ownership for our actions. We advocate for the safety and wellbeing of our people in everything we do. We recognise and acknowledge each other’s successes. We back each other as a united team, by sharing learnings and expertise between departments and across borders. Global Game Changers BUSINESS OVERVIEW Forever Curious Go Beyond Together We Thrive 9 IMDEX Annual Report 2024 10 IMDEX Annual Report 2024 Our integrated solutions fit within the following three broad categories: Drilling Optimisation Products, Rock Knowledge Sensors, and Real-time Data & Analytics. Our focus is on providing solutions that combine products and services from each of these categories to deliver greater productivity and value for customers. A suite of products that enhance drilling productivity while improving safety and the impact on the environment: Best-in-class sensors that originate critical data on the four elements of rock knowledge: location, grade, mineralogy, and texture. The combined offering provides customers greater choice and the ability to match the right sensors to the right geological program. A secure cloud platform and market leading geoscience analytical software to enrich data and enable real-time decisions to be made further upstream: • Drilling fluids • Solids removal units • Rig alignment technologies • Directional drilling technologies • Down hole survey sensors • Core orientation sensors • Gamma logging sensors • Structural orientation sensors • Devico survey data management system (DeviCloud) • Krux drilling analytics software • Cloud-based data collection and validation platform • Advanced reporting software • Geoscience analytics software • Interpretive mineralogy software • 3D visualisation software Our Integrated Offering Drilling Optimisation Products Rock Knowledge Sensors Real-Time Data & Analytics Our global presence is unrivalled. This presence provides a compelling opportunity to embed real value for customers and maximise revenue and earnings for IMDEX. We support customers in more than 100 countries and have 26 IMDEX facilities, together with warehouses and calibration centres in key mining regions of the world. Our Head Office is located in Balcatta, Western Australia. During FY24, we completed the operational integration of Devico, including its four facilities and a world-class R&D and manufacturing facility in Trondheim, Norway. This facility and its team of engineers, complement our existing capabilities in California and Australia. The acquisition of Devico significantly strengthens our core business and global presence, particularly in Europe. Our Established Global Business 11 IMDEX Annual Report 2024 Our long-standing customer base includes large drilling contractors and resource companies within the global minerals industry. We are creating a collaborative ecosystem, where we partner with all customers to optimise orebodies and support resource stewardship. Our Customers and Industry Partners IMDEX facilities (not including distributors) 12 IMDEX Annual Report 2024 Financial Highlights $445M GROUP REVENUE UP 8% Up 7% on a constant currency basis (FY24 $445.3m v FY23 $411.4m) 29% EBITDA NORMALISED1 Maintained baseline margin while investing in growth (FY24 29.4% v FY23 29.8%) $70M DEVICO REVENUE UP 13% Revenue synergies running ahead of targets (FY24 $69.9m v FY23 $61.3m)4 $131M EBITDA NORMALISED1 UP 7% Up 3% on a constant currency basis (FY24 $130.7m v FY23 $122.6m) $56M NPATA2 NORMALISED1 Normalised effective tax rate of 31% (FY24 $55.6m v FY23 $56.8m) 96% CASH CONVERSION Strong working capital discipline (FY24 96% v FY23 82%) 30% Dividend Payout Ratio 2.8cps full year dividend (FY24 2.8cps v FY23 3.6cps) $35M NET DEBT3 Robust balance sheet with net leverage of 0.3x (FY24 $35.0m v FY23 $64.9m) 12 IMDEX Annual Report 2024 Normalised to exclude significant items including Devico integration and organisational redesign costs ($10.5m) plus MAGHAMMER impairment costs ($7.4m) Excludes after tax impact of intangible asset amortisation charge from acquisitions, tax effected at 30% Cashless external borrowings (excluding lease liabilities) Revenue for comparable period (4 months actuals of $20.6m plus 8/12 of CY22) was $61.3m 1 2 3 4 13 IMDEX Annual Report 2024 OUR GROUP REVENUE OF MARKS ANOTHER RECORD FOR OUR COMPANY. $445.3 MILLION Paul House Managing Director & Chief Executive Officer IMDEX ACTx™ 13 IMDEX Annual Report 2024 14 IMDEX Annual Report 2024 Strategic Highlights 14 IMDEX Annual Report 2024 New Business Growth Digital Busines IMT Business • 28% of Sensor & SaaS revenue is IMDEX HUB-IQ™ connected • IMDEX HUB-IQ connected customers up 10% • Enabled connection of Devico sensors to IMDEX HUB-IQ™ • Krux Analytics and Datarock leveraged IMDEX global network and doubled SaaS activity • Additional installed BHS™ sites and a strong pipeline of trials planned • Increased penetration to underground production hole survey market • BLASTDOG™ commercial trials on track with additional sites in pipeline for FY25 Technology Leadership Core Business Growth Integrated Solutions • Release of IMDEX HUB- IQ™ connected ACTx™ and OMNIx™ • Sensor ARPU up 7% • 10% uplift in customers upgrading to higher-end survey technologies1 • 48% of top 250 customers have >3 IMDEX products, up from 46% • Directional drilling projects expanded into USA, Africa and Australia leveraging IMDEX network • Consolidation of fluid products with increasing gross margins During FY24, we continued to invest in our core business growth including technology leadership, the integration of Devico sensors and directional drilling services and the expansion of our integrated solutions. Within our new business growth, we supported our Datarock and Krux investments, while developing our IMDEX Mining Technologies business. In line with strategy to transition customers to advanced solutions that deliver greater value Percentages and metrics compared to FY23 Statistics include Devico Average Revenue Per Unit (ARPU), BLAST HOLE STABILIZER (BHS™), IMDEX Mining Technologies (IMT) 1 15 IMDEX Annual Report 2024 ESG Highlights 15 IMDEX Annual Report 2024 We consider ESG through two distinct lenses: (1) Inside our business and the practices that we can control to ensure we are setting the right targets and continuously improving for our people and our planet; and (2) Outside IMDEX and how we can leverage our research and development capabilities to enhance the sustainability of our customers' operations and the communities in which they operate. We set our annual sustainability targets within five focus areas: people, innovation, the environment, society and governance. Further information will be provided in our FY24 Sustainability Report, which will be released on 14 October 2024. In accordance with the requirements of the Workplace Gender Equality Act 2012, IMDEX Limited lodged its annual public report with the Workplace Gender Equality Agency on Wednesday, 26 June 2024. People Innovation • Sustained a high safety engagement and performance with a growing field-based workforce1 • First IMDEX DE&I survey highlights respect, wellbeing and a culture of care within IMDEX • Scoped ESG Awareness Training module • Boosted Gallup Employee Engagement by +0.07 to 3.88 points • Reduced weight and length of OMNIx™ running gear by 21% and 53% respectively • Underground survey deployment solution to reduce working from heights Environment Governance • Achieved 95% recyclable packaging for drilling optimisation products • Achieved 95% reusable packaging for rock knowledge sensors • Welcomed Tracey Horton AO as non-executive Director and Paul House as Managing Director • Sustainability Board Committee established • Expanded modern slavery training to broader stakeholder group • Updated third party due diligence system implemented Society • Established Community Engagement Policy • Launched Global Volunteering Program • Better Together diversity and inclusion workshops attended by >400 employees LTIFR of 1.27 and TRIFR of 3.80 ESG – Environmental, Social and Governance 1 16 IMDEX Annual Report 2024 Chairman’s Address Dear fellow shareholders, On behalf of the IMDEX Board of Directors, I am delighted to present the Company’s Annual Report for the 2024 fiscal year (FY24). The highlight of FY24 has been IMDEX’s ability to deliver strong performance in a declining market while successfully integrating Devico, a sizeable and transformative acquisition. Thanks to the dedication of the IMDEX and Devico teams, the integration proceeded smoothly, and this is clearly reflected in our results. Financial Performance IMDEX achieved record revenue of $445.3m, an 8% increase over FY23. Normalised EBITDA reached $130.7m, a 7% uplift from the previous year. Other notable highlights include our robust cash flow and disciplined capital deployment. Safety & Wellbeing The Board and Executive are focused on maintaining a safety culture globally. Unfortunately, three incidents occurred in the latter part of the year, impacting the Company’s safety performance. IMDEX’s Lost Time Injury Frequency Rate was 1.27, and its Total Recordable Injury Frequency Rate was 3.80, up from 0.77 and 0.42, respectively, in FY23. It is important to note that IMDEX's safety performance continues to rank at the forefront of its industry. The Board and Executive remain focused on ensuring all employees remain safe and continue to invest in our safety culture. Strategy Execution IMDEX’s ability to deliver on its growth strategy while prioritising the integration of Devico was exemplary. Within the Company’s core business, IMDEX successfully released new and next-generation technologies and advanced its integrated offerings, including Devico’s sensors and directional drilling services. It was also gratifying to see real momentum and progress within our new growth businesses, Digital and IMDEX Mining Technologies. Our strategic investments in Krux Analytics and Datarock are progressing well and complement our ‘best-in-breed’ technologies. Similarly, commercial trials with IMDEX’s suite of products within IMT are progressing well and remain an exciting opportunity for meaningful future returns that are less subject to cyclical themes. 17 IMDEX Annual Report 2024 Devico DeviAligner™ 17 IMDEX Annual Report 2024 18 IMDEX Annual Report 2024 During FY24, we established a Sustainability Board Committee which is gaining momentum and reflects our commitment to sustainable practices and enhancing ESG-related disclosures. Notable achievements include commercialising next- generation products to enhance safety, achieving 95% recyclable and reusable packaging, expanding modern slavery training, and establishing IMDEX’s Community Engagement Policy and Global Volunteering Program. It is pleasing to note that this program is garnering great interest across IMDEX. IMDEX’s disciplined approach to capital management remains steadfast and a key focus. Key elements include maintaining a strong balance sheet, investing in growth initiatives to drive innovation, and sustaining a 30% NPAT dividend payout ratio for shareholders. During FY24, IMDEX continued accelerated term debt amortisation and increased its investment in growth initiatives. The Board was pleased to pay an interim fully franked dividend of 1.5 cents per share and declare a fully franked final dividend of 1.3 cents per share. As Chair, I am pleased with the evolution of the Board and Executive Leadership Committee. Each member continues to display a high level of professionalism and commitment. It is indeed a pleasure working alongside you all. In November 2023, we welcomed Tracey Horton as a Non-Executive Director. Tracey’s extensive Board experience, exposure to emerging technologies, and strong finance and governance capabilities complement our Board's existing diversity and strengths. Sustainability Disciplined Capital Management A Talented Collaborative Team 19 IMDEX Annual Report 2024 During FY25, Tracey will assume the Chair of the Audit, Risk, and Compliance Committee, while Sally-Anne Layman will assume the Chair of our Remuneration and Sustainability Board Committees. In March, Paul Evans announced his retirement, effective late calendar 2024. The Board sincerely thanks Paul for his 18 years of service, guiding IMDEX through various market conditions to become the leading global mining-tech company it is today. Following an extensive search, Linda Lim, IMDEX’s current Global Head of Finance, will be appointed CFO effective 1 January 2025. Linda's strong credentials and Paul's guidance will ensure a smooth transition. IMDEX’s ability to deliver on its growth strategy while prioritising the integration of Devico was exemplary. Anthony Wooles IMDEX Chairman 19 IMDEX Annual Report 2024 For the balance of FY25, the Board and Executive Leadership team will be acutely focused on the safety and well-being of our employees and disciplined performance delivery. IMDEX is in its strongest position to drive sustained growth, and we look forward to another successful year. Thank you for your continued support. Looking to FY25 20 IMDEX Annual Report 2024 Mr Paul House Ms Sally-Anne Layman Ms Trace Arlaud Mr Uwa Airhiavbere Ms Tracey Horton AO Managing Director and CEO Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Appointed CEO in July 2020 and Managing Director in March 2024 Expertise: Management, operations, strategy and governance Appointed February 2017 Expertise: Exploration, mining and finance Appointed February 2021 Expertise: Mining engineering, geology and geophysics Appointed December 2022 Expertise: Digital transformation, Digital 4.0 and the resources sector Appointed November 2023 Expertise: Corporate strategy, economics, finance and accounting IMDEX Annual Report 2024 Board of Directors 20 Mr Anthony Wooles Non-Executive Chairman Appointed July 2016 Expertise: Financial and capital markets and strategic marketing 21 IMDEX Annual Report 2024 During FY24, Ivan Gustavino retired from the Board following our Annual General Meeting on 19 October 2023. Mr Gustavino was appointed to IMDEX’s Board as a Non-Executive Director on 3 July 2015. Over his 8 years of service, he has provided valuable guidance and advice to the Company. On 13 November 2023, we were pleased to announce the appointment of Tracey Horton AO, as a Non-Executive Director of IMDEX’s Board. Ms Horton has critical skills in corporate strategy, change management, economics, finance and accounting. She also has broad international experience having lived and worked in Australia, the USA, Canada, and the UK. Now based in Perth, Ms Horton will support IMDEX’s continued growth as a global mining-tech company. Ms Horton has extensive Board experience within diverse industries for public and private companies, together with government and not-for-profit organisations. In March 2024, we were pleased to announce the appointment of IMDEX CEO, Mr Paul House, to the Board as Managing Director. This appointment recognises Mr House's achievements and vision for the future of IMDEX. Our Board has extensive professional expertise, business experience and knowledge of the mineral exploration, mining, and technology industries. It also has considerable experience within capital and financial markets and digital transformation. Members of the Board are well respected in these arenas and play an active role in our Company’s strategic planning. Ms Horton’s most recent executive role was Winthrop Professor and Dean of the University of Western Australia Business School. As a faculty Dean, she led the Business School comprising circa 5000 students and 500 staff. Other select career highlights include: Key Priorities for the Board during FY24 included: During FY25, the Board will focus on: • Advising senior executives and Board members of major clients including Alinta, Iluka Resources and Woodside as one of nine Australian Directors of Poynton and Partners and GEM Consulting. • Leading multiple large teams to solve business challenges for clients including Nike, The Gap, Microsoft, Pacific Gas & Electric and Baxter Healthcare at Bain & Company, Inc. • Conducting analysis and research of business conditions including business finance and international trade and finance as an economist with the Reserve Bank of Australia. • IMDEX’s safety culture and building on the quality engagement as first measured in FY23 • Disciplined integration of Devico to realise sustainable growth from FY25 • Maintaining an efficient business model for IMDEX’s next level of growth • Capital management • Monitoring global market conditions • Protecting our people • Building our capability to support core and new growth businesses • Ensuring disciplined performance delivery from the integrated IMDEX and Devico businesses 22 IMDEX Annual Report 2024 Review of Operations Managing Director and Chief Executive Officer Dear Shareholders, The past 12 months have been remarkable for IMDEX. Our record performance, coupled with the seamless integration of Devico into our global operations, has yielded significant revenue and cost synergies ahead of schedule. Throughout this period, our strategy remained on course, with the next generation of our core technologies coming to market and our growth business investments progressing as planned. To execute such a significant body of work while navigating both the substantial decline in exploration activity, and a high inflationary cost environment, has been a challenge. It is a testament to the high calibre and culture of the IMDEX team we have around the world, and the quality of the business model. It is one thing to claim that we can build a business to weather the cyclical impacts of our industry, yet quite another to deliver it. The FY24 year has been a thorough test of that claim, and our results are a validation of the hard work done to make that a reality. I am delighted to share with you here, in this, your annual report, how we continued to build on the strategic foundations laid in previous years. 23 IMDEX Annual Report 2024 Subdued exploration activity was evident throughout FY24, particularly in the second half. Regions most impacted were Canada and Western Australia. Despite these conditions, the strength of our core business enabled us to outperform market conditions, winning significant market share in many regions. This success is a testament to our technology leadership and the global network we can service. Our five-year revenue CAGR of 12.8%, compared to the benchmark S&P exploration expenditure for nonferrous metals with a CAGR of 5.6%, demonstrates our continued ability to outperform the market. Our normalised EBITDA of $130.7m, with an EBITDA margin of 29.4%, which is in line with FY23 at 29.8%. Achieving this margin in an inflationary environment and declining market activity is particularly pleasing and reflects disciplined cost management, synergies from the Devico acquisition, and expanded gross margins in both sensors and fluids. On a constant currency basis, revenue and earnings grew by 7% and 3%, respectively. Most notably, we utilised a $120m debt facility to finance our acquisition of Devico. We made significant strides in accelerating the pay down of this four-year facility, thanks to the strong operating performance of the combined businesses and disciplined working capital management. By the end of FY24, 38% of the total debt had been paid down. Our capital management policy remains unchanged. Alongside accelerated debt repayment, we maintain a normalised NPAT dividend payout ratio of 30% and continue to invest approximately 8% of our revenue in R&D. This investment throughout exploration cycles is crucial for future revenue growth and our continued outperformance in FY24 validates this strategy. FY24 Financial Highlights This achievement is even more significant given the global downturn in exploration expenditure, with activity contracting by 24%. Against this challenging backdrop, our revenue growth of 8%, bolstered by a $69.6m contribution from Devico, is extraordinary. Our Group revenue of $445.3m was another record for our Company. 24 IMDEX Annual Report 2024 Our core business growth strategy focuses on technology leadership and integrated solutions for our customers, now including Devico sensors and directional drilling. In our emerging Digital and IMDEX Mining Technology (IMT) business units, we leverage our core competencies around sensors to develop applications for the mining production market. We enhance these capabilities with geoscience analytics, AI, and computer visualisation. Within our core business, the expansion of our survey technology stack has led to an increase in DeviGyros within our network – a combination of market share gains, and survey technology stack upgrades. In addition, our new OMNIx™ gyros are the fastest growing sensor in our fleet, a testament to the sensor’s new and improved running gear making the user experience safer and faster. In the second half of this year, we released our next generation IMDEX HUB-IQ™ connected core orientation sensor, the ACTx™. These advancements contributed to a 7% increase in our sensor Average Revenue Per Unit (ARPU) in FY24. Our integrated solution strategy continues to gain momentum, supported by the inclusion of Devico directional drilling technology. We have successfully expanded into the USA, Africa, and Australia by leveraging the IMDEX sales network. Currently, 48% of our top 250 customers utilise more than three of our products, up from 46% in FY23. Strategic Highlights Technology Leadership Integrated IMDEX Offerings Within our Digital Business, highlights include: • Approximately 28% of our Sensor & SaaS revenue is IMDEX HUB-IQ™ connected. • A 10% increase in IMDEX HUB-IQ™ connected customers. • The successful integration of our Devico sensor fleet with IMDEX HUB-IQ™. Digital Business 25 IMDEX Annual Report 2024 Our strategic investments in Datarock and Krux are yielding promising results. Datarock reported a twofold increase in SaaS activity and was recognised as the InvestMETS Start-Up of the Year. This is a great accolade for its team. Similarly, Krux experienced a twofold increase in SaaS activity, securing global contracts with major resource and drilling companies. IMDEX Mining Technologies Business Our IMT Business’ organic expansion into the adjacent mining production space continues to gather momentum with additional installed BHS sites, increased penetration into the underground survey market and ongoing progress with BLAST DOG™ commercial trials. Importantly, we have a robust pipeline of new trials for IMT technologies planned for FY25. Regardless of market conditions, IMDEX's strategy, product suite, and addressable market position us to continue outperforming. The results from Devico, Krux, Datarock, and the rapid uptake of new R&D solutions validate this strategy. I am immensely proud of our global teams for successfully integrating Devico into our operations while delivering on our core growth strategy and responding to challenging market conditions. The operational integration of Devico was completed ahead of schedule in 1H24, unlocking greater savings than anticipated. IMDEX BLASTDOG™ 26 IMDEX Annual Report 2024 26 IMDEX Annual Report 2024 27 IMDEX Annual Report 2024 Sustainability Highlights Industry Outlook IMDEX has operated an ESG working group within the executive leadership team for the past four years. In FY24, we formalised Sustainability as a sub-committee reporting directly to the Board, recognising its increasing importance to our people, shareholders and customers. Our sustainability strategy is centred around five key working groups: People, Innovation, the Environment, Society, and Governance. The supply shortfall for copper and gold, representing about 75% of all exploration activity, is well-documented, with shortfalls projected into the next decade. Long-term demand for cobalt, nickel, and lithium remains strong, driven by decarbonisation goals. This gap should lead to increased commodity prices, driving exploration budgets and capital raising. We anticipate a resumption of drilling activity, marked by increased rig utilisation and exploration expenditure. Enhancing productivity in the exploration business will be key, and IMDEX is well-positioned to lead in this area. As new projects become more complex, the value of IMDEX solutions to clients increases. Further details on our Sustainability approach and FY25 targets will be released in our FY24 Sustainability Report on 14 October 2024. People: We maintained strong safety engagement and performance, even as our field-based workforce continued to grow. We successfully piloted our first Diversity, Equity, and Inclusion (DEI) measures, respect, wellbeing and a culture of care at IMDEX. Additionally, we scoped an ESG Awareness Training module for employees and improved our Gallup Employee Engagement score by 0.07 points, bringing it to 3.88. Innovation: We enhanced the user experience for our core products, making OMNIx™ running gear lighter and developing an underground survey deployment system for BOLT™ to reduce safety risks. Environment: We increased the percentage of recyclable and reusable packaging for all our products. Over 95% of our Drilling Optimisation Product packaging is recyclable, and over 95% of our Rock Knowledge Sensors packaging is reusable. Society: We established a Community Engagement Policy, launched our Global Volunteering Program with strong workforce participation, and conducted 'Better Together' diversity and inclusion workshops, attended by over 400 employees. Governance: We welcomed Tracey Horton as a new non-executive director and expanded our modern slavery training program. We also revised and updated our third-party due diligence system across all global operations. IMDEX seeks to outperform underlying market activity but remains exposed to industry cycles. We focus on four key indicators guiding our industry outlook: The supply shortfall for key commodities. Commodity prices. Exploration budgets for producers and capital-raising activity for juniors. Actual exploration spend, including rig utilisation, project permitting, and drill hole activity. 1. 2. 3. 4. 28 IMDEX Annual Report 2024 The culture that our people around the world bring to the workplace is a highlight of our business. Our ability to attract world-class talent to support our growth, both now and in the future, is strong. I extend my thanks to our executive leadership team and all our people globally. It has been a challenging and rewarding year. Above all else, it is my privilege to work with you. This year, I would like to make a point of expressing my gratitude to Paul Evans, who will step down from his role as CFO at the end of calendar 2024. During my time with the Company, Paul has been a steadfast and trustworthy support. Paul’s many achievements and contributions to the growth of IMDEX as a leading global mining- tech company over the past 18 years should be acknowledged. The opportunities we have ahead of us are only possible because of the hard work that has come from the teams that came before us, and Paul has been a figurehead in that journey for nearly 2 decades. I would ask that you join me both in recognising Paul and wishing him well in a life post-IMDEX. During FY25, we will remain acutely focused on four key areas. Protecting and developing our people and building capability to support our core and new growth businesses. Investing in Digital 2.5 to scale efficiently and securely, while optimising our cost base for our fluids and digital business. Expanding our integrated solutions and directional drilling within our core business. Continuing to invest in our Digital and IMT businesses for greater recurring and less cyclical revenues over the longer term. 1. 2. 3. 4. As announced on 23 July, our Global Head of Finance, Linda Lim, will transition to CFO. Following a thorough selection process, Linda stood out against a field of quality candidates. Her commitment and dedication to IMDEX has already been evident during her time with us, and Linda’s appointment as CFO is a My Thanks to a Talented Team Key Focus Areas for FY25 Looking ahead, enhancing productivity in exploration will be a key driver of activity. 29 IMDEX Annual Report 2024 Our ability to attract world-class talent to support our growth has never been stronger. I extend my sincere thanks to our executive leadership team and all our people globally. Paul House IMDEX Managing Director and Chief Executive Officer 29 IMDEX Annual Report 2024 natural progression for a highly talented individual who will provide great benefits to her team, fellow executives, and shareholders. Importantly, Paul and Linda will work closely together to ensure a seamless transition for our shareholders. Finally, I would like to thank our Board members for their commitment and guidance. I would particularly like to thank Ivan Gustavino, who made the decision not to seek re-election to our Board of Directors at our FY23 AGM on 19 October 2024. Over Ivan’s eight years of service, he provided valuable guidance and advice to our company. In November 2023, we were pleased to welcome Tracey Horton as our newest non- executive director of the board. Tracey’s CV is remarkable, and she brings extensive experience from which we are benefiting. In late March 2024, I was pleased to be appointed Managing Director. It is a privilege to be part of IMDEX’s Board and global team, working with excellent directors and fellow executives as we continue to deliver on our global growth plans. As Managing Director, I look forward with great enthusiasm to delivering on our growth strategy by continuing to build a global business that rewards our shareholders, customers, and employees. 30 IMDEX Annual Report 2024 Executive Leadership Committee Time with IMDEX Joined as Chief Executive of REFLEX in 2017. Transitioned to Chief Operating Officer in 2019 and commenced as Chief Executive Officer in 2020. Experience >30 years within the resources and technologies sectors. Lived and worked in a wide range of international markets including the USA, Australia, Africa, India, the Middle East, and Southeast Asia. 14 years with SGS, the world’s leading inspection and testing firm, with a dominant presence in the resources geochemistry assay and metallurgy sectors. Expertise Management, strategy, operations, corporate finance and governance. Professional Qualifications Bachelor of Commerce from the University of Western Australia. Memberships and Associations Fellow of the Australian Institute of Management and Graduate Member of Australian Institute of Company Directors. Time with IMDEX Commenced as Chief Financial Officer and Company Secretary in 2006. Experience >35 years within the mining services, media, manufacturing, and telecommunications sectors. Expertise Finance, governance and management. Professional Qualifications Chartered Accountant Australia and New Zealand. Memberships and Associations Fellow of Chartered Accountants Australia and New Zealand and Graduate Member of Australian Institute of Company Directors. Time with IMDEX Joined IMDEX in 2018 as Vice President Asia Pacific and Global Supply Chain Manager, transitioned to Chief Operating Officer in 2020. Experience >25 years with Gearhart United – a subsidiary of SGS and a leading designer and manufacturer of oilfield equipment in Australia. Expertise General management and all aspects of supply chain including manufacturing, service, fleet management and logistics. The drilling industry and equipment. Professional Qualifications Leading Organisational Impact - Melbourne Business School Executive Program. Mr Paul House Mr Paul Evans Mr Shaun Southwell Managing Director and Chief Executive Officer Chief Financial Officer Chief Operating Officer 31 IMDEX Annual Report 2024 Time with IMDEX Joined IMDEX in 2021 as Global Commercial Manager. Experience >16 years’ experience within the resources and advisory sectors with Asia Pacific the Middle East, Europe and the Americas. 6 years’ experience with Weatherford International as Global Commercial Director. Expertise Commercial strategy, marketing, M&A and corporate transformations. Professional Qualifications Bachelor of Science in Management and Finance from Technological University Dublin. Time with IMDEX Joined following IMDEX’s acquisition of ioGlobal in 2012. Appointed to General Manager of IMDEX Product Development in 2019. Transitioned to Chief Product and Marketing Officer in 2020. Experience >25 years in the mining industry. >10 years as a geoscientist in technical and management roles for tier one mining companies. >15 years focusing on mining technology development. Expertise Innovation and product development within the mining industry. Professional Qualifications PhD in Geochemistry from Monash University. Memberships and Associations Member of Austmine Board. Member of the Insead Alumni Association. Member of Datarock Pty Ltd and Krux Analytics Board. Time with IMDEX Joined as Chief Geoscientist following IMDEX’s acquisition of ioGlobal in 2012. Appointed Chief Geoscientist and Chief Technologist - Mining Solutions in 2015. Experience Global positions in exploration geochemistry and R&D with Pasminco and Anglo American before cofounding ioGlobal in 2004. Expertise Geochemistry, geometallurgy, innovation, analytics and cloud- based data management and analysis. Professional Qualifications PhD in Geosciences and Analytics from the University of New England. Memberships and Associations Member of AusIMM, member of Advisory Board UWA Data Institute and member of Centre for Exploration Targeting (CETUWA) Technical Working Group. Mr Shane Plant Dr Michelle Carey Dr Dave Lawie Chief Commercial Officer Chief of Strategy Chief Geoscientist 32 IMDEX Annual Report 2024 Time with IMDEX Joined in 2022 as Chief Technology Officer. Experience >30 years in oil and gas formation evaluation, drilling tool development and operations with companies including Teleco Oilfield Services, Baker Hughes and APS Technology. Expertise Engineering, R&D, business development and field operations globally. Professional Qualifications Bachelor of Science in Petroleum Engineering from Penn State and Master of Science in Environmental Management from University of Houston – Clear Lake. Time with IMDEX Joined as Human Resources Manager Asia Pacific in 2017. Transitioned to Global Head of Human Resources then Executive General Manager of Human Resources. Experience >18 years as a human resources generalist. Broad industry experience including resources, banking, hospitality and not-for- profit sectors for national and global organisations. Expertise Strategy, talent acquisition, industrial relations and organisational development. Professional Qualifications Bachelor of Business, Human Resources Management & Management, Edith Cowan University. Memberships and Associations Graduate Member of Australian Institute of Company Directors and Graduate Member of Chief Executive Women (CEW) Leaders Program. Time with IMDEX Joined in 2021 as General Counsel and Company Secretary. Experience International experience gained across a wide range of markets, including North America, Asia Pacific, Middle East, Japan, and Europe. Worked for tier one mining company and one of world’s largest oilfield services companies. Expertise Corporate and commercial law. Corporate governance and dispute resolution. Building collaborative partnerships within the resources sector. Professional Qualifications Admitted as a barrister and solicitor in the Supreme Court of New South Wales; admitted as a Solicitor in England & Wales. Master of Business Administration from Curtin University, Bachelor of Laws from Murdoch University, Bachelor of Science (Geology) from University of Western Australia. Memberships and Associations AMPLA (Australian Mining and Petroleum Lawyers Association) and ACC Australia (Association of Corporate Counsel). Mr John Hickey Kiah Grafton Michael Tomasz Chief Technology Officer Chief of People Chief Legal Officer 33 IMDEX Annual Report 2024 Time with IMDEX Joined in 2023 as Chief Information Officer. Experience International technology experience with Chevron across the resources value chain, from upstream through to downstream, and with Microsoft. Expertise Technology strategy and execution including data science, software development, and cyber security. A track record in the delivery of large-scale program and portfolios comprising enterprise systems, information management, and infrastructure. Initiation and orchestration of complex, transformational enterprise initiatives. Professional Qualifications Bachelor of Commerce and Bachelor of Arts from the University of Auckland. Memberships and Associations Graduate Member of Australian Institute of Company Directors Memberships and Associations Graduate Member of Australian Institute of Company Directors Wayne Panther Chief Information Officer I am pleased with the evolution of the Board and Executive Leadership Committee. Each member continues to display a high level of participation and professionalism. 33 IMDEX Annual Report 2024 Anthony Wooles Chairman 34 IMDEX Annual Report 2024 Key Metrics FINANCIAL PERFORMANCE $m (unless indicated otherwise) FY24 FY23 VAR% Revenue 445.3 411.4 8% EBITDA 112.9 100.5 12% EBITDA Normalised1 130.7 122.6 7% EBITDA Margin % Normalised1 29.4% 29.8% (0.4%) NPAT 32.4 35.0 (7%) NPATA2 Normalised1 55.6 56.8 (2%) EPSA Normalised1 (cents) 9.2 12.0 (23%) EPSA2 Normalised1 (cents) 10.9 12.9 (16%) Pre-Tax Operating Cash Flow 126.5 105.0 20% Pre-Tax Operating Cash Flow Per Share (cents) 24.8 23.9 4% Net Assets (at 30 June) 571.3 556.2 3% Net (Debt)3 (at 30 June) (35.0) (64.9) (46%) Full Year Fully Franked Dividend (cents) 2.8 3.6 (22%) Full Time Employees (at 30 June) 816 851 (4%) Normalised to exclude significant items including Devico integration and organisational redesign costs ($10.4m) plus MAGHAMMER impairment ($7.4m) Excludes after tax impact of intangible asset amortisation charge from acquisitions, tax effected at 30% Cashless external borrowings (excluding lease liabilities) 1 2 3 Strong underlying financial performance benefiting from Devico revenue synergies 2H24 impacted by continued weakness in global exploration activity, partly offset by market share gains Organisational design, including Devico integration, completed in 1H24. Strategic decision to reinvest savings into business, positioning IMDEX strongly for market upturn Consistently high cash conversion and accelerated reduction in net debt since Devico completion Disciplined approach to capital management 35 IMDEX Annual Report 2024 35 IMDEX Annual Report 2024 Revenue Growth Stonger business model enables outperformance S&P Global Market Intelligence March 2024 S&P Global Market Intelligence by reported drill holes S&P CY 5-year Exploration Spend CAGR 5.6% v IMDEX FY24 5-year Revenue CAGR 12.8% 1 2 3 Strong performance against declining global exploration activity Global exploration budgets down ~5% for CY241 Global exploration drilling declined ~24% on pcp2 – impacted by high-cost operating environment Sensors & SaaS Revenue 64% up from 60% in FY23 FY24 Revenue v FY23 up 12.8% 8% 5-Year FY Revenue CAGR3 IMDEX Devico $m FY20 237.7 FY21 264.4 FY22 341.8 FY23 390.8 20.6 411.4 445.3 FY24 375.7 69.6 36 IMDEX Annual Report 2024 Revenue by region Unrivalled global footprint with diversified revenue streams % of FY24 Group Revenue Americas 48% EA 26% APAC 26% EA 25% APAC 29% Americas 46% % of FY23 Group Revenue Devico Revenue Performance Synergies ahead of expectations despite softer market conditions A 15% increase over pcp in Directional Drilling revenue, including expansion in USA, Africa, and Australia A 12% increase pcp in sensor revenue including the benefits of cross-selling within the IMDEX network Completed the transition from Devico sensor sales to IMDEX’s recurring rental model IMDEX Annual Report 2024 37 IMDEX Annual Report 2024 IMDEX Devico Americas FY23 – FY24 Consolidated Asia Pacific Europe/Africa IMDEX Group 14% -1% -4% 2% 9% 9% 12% -11% 13% -2% 11% 8% Revenue v PCP up 14% Revenue for comparable period (4 months actuals of $20.6m plus 8/12 of CY22) was $61.3m 1 IMDEX Annual Report 2024 Devico Directional Drilling Devico Sensors (rental and sales) $m FY231 FY24 29.8 33.5 31.5 36.1 61.3 69.6 38 IMDEX Annual Report 2024 EBITDA Strong cost management with baseline EBITDA margin maintained Ongoing investment in R&D of ~8% of FY24 revenue with the majority expensed Ongoing investment in core business growth – integrated solutions and directional drilling Increased investment in new business growth – Digital and IMT High quality business model demonstrating resilient earnings 20.1% 7% 5-year EBITDA CAGR FY24 EBITDA1 v FY23 up Normalised to exclude significant items including Devico integration and organisational redesign costs ($10.4m) plus MAGHAMMER impairment ($7.4m) 1 22.9% 54.4 $m FY20 28.6% 75.5 FY21 30.7% 104.9 FY22 29.8% 122.6 FY23 29.4% FY24 EBIDTA% 130.7 39 IMDEX Annual Report 2024 Disciplined R&D Capital Allocation Total R&D spend ($m)1 Expensed v capitalised R&D ($M) IMDEX is a growth business committed to R&D in all market conditions All R&D spend is expensed except spend associated with software development which is capitalised Investment in Horizion 1 increased during FY22-FY24 reflecting the investment in the next generation of our core product portfolio ($m) FY24 FY23 R&D Expensed 34.4 30.7 R&D Capitalised (software) 2.5 5.1 Total 36.9 35.8 Horizon 1 – Next generation core technologies impacting revenues in 1–2 years Horizon 2 – New core technologies impacting revenues in 2–3 years Horizon 3 – Transformative technologies impacting revenues in 3–5 years Expensed R&D and capitalised software development costs as a % of revenue Following the organisational redesign, total R&D spend now includes product management. Prior years have been restated for comparative purposes. 1 FY21 $21.0m 8.0% FY22 $33.0m 9.7% FY23 $35.8m 8.7% FY24 $36.9m 8.3% Devico DeviAligner™ 40 IMDEX Annual Report 2024 Disciplined Capital Management Strong cash generation accelerating debt repayment Other includes Devico integration costs, interest and non-cash items including provisions, share of associates and FX movements Principally next generation sensors Other investing includes software capitalisation ($2.5m) with balance comprising investment in 51.9% owned Datarock and 41% owned Krux Other financing includes lease payments ($10.0m) and interest ($7.8m) 1 2 3 4 41 IMDEX Annual Report 2024 96% reported EBITDA to operating cashflow conversion (112% pre-tax) Strong working capital discipline Net Working Capital (NWC) investment in line with historical trend $m 58.1 (6.6) 130.7 (18.4) (18.5) (43.2) (7.7) (17.8) 3.5 3.7 (29.3) 47.1 Investment Activities Operating Activities Financing Activities FX (35.9) 108.0 (79.4) (3.7) Normalised EBITDA Other1 Dividends FX Opening Cash NWC Other Investing3 Other Financing4 Tax PPE Additions2 Borrowings Closing Cash 42 IMDEX Annual Report 2024 42 IMDEX Annual Report 2024 Strong Balance Sheet Ability to reinvest in business and growth Strong free cashflow generation has enabled accelerated debt repayment Net leverage ratio of 0.3x1 Interest coverage ratio of 6x1 Devico purchase price accounting finalised MAGHAMMER IP full impairment (non- cash) consistent with cessation of sale process in 1H24 ROE reflects ongoing investment in long-term sustainable growth for shareholders Normalised to exclude significant items including Devico integration and organisational redesign costs ($10.4m) plus MAGHAMMER impairment ($7.4m) previously an asset held for sale 1 $m (unless indicated otherwise) 30 June 2024 30 June 2024 Cash 47.1 58.1 Receivables 90.6 90.1 Inventory 63.0 67.5 Fixed assets 94.2 90.3 Intangibles 414.5 426.8 Investment in associates 11.3 13.9 Assets held for sale1 – 7.4 Other Assets 65.5 57.0 Total Assets 786.2 811.1 Payables 43.9 46.8 Borrowings 82.1 123.0 Other liabilities / deferred tax 88.9 85.1 Total Liabilities 214.9 254.9 Total Equity 571.3 556.2 ROE Normalised1 (%) 8.4% 12.4% ROCE Normalised1 (%) 11.3% 11.4% 43 IMDEX Annual Report 2024 IMDEX Annual Report 2024 Devico DeviGyroOX™ 43 44 IMDEX Annual Report 2024 FY24 Operating Environment and Outlook OPERATING ENVIRONMENT AND OUTLOOK While FY24 saw a significant decline in exploration activity, the long-term industry fundamentals remain compelling and are signalling increased activity. The supply shortfall for gold and copper, which represents ~75% of global exploration activity, is predicted to result in substantial supply shortfalls in the medium to longer term. Similarly, demand for other battery metals is expected to intensify in the medium term due to increasing decarbonisation targets. This supply shortfall has resulted in higher commodity prices, particularly gold. In turn, we expect increased exploration budgets for producers and capital raisings for juniors. Historically, there is a six-to-nine-month interval between funds being raised and subsequently deployed on-site. As these funds are allocated, we anticipate an uplift in rig activity, new projects being permitted, and a rise in overall exploration expenditure globally. We expect activity in FY25 will remain relatively flat as customers in some jurisdictions complete cost out programs and reset for the industry upturn. We have a unique competitive position, however, to address increasing demand for productivity and greater orebody knowledge. We maintain our clear objective of outperforming industry growth through technology leadership, together with solutions and managed services, while pursuing new growth via our Digital and IMT businesses. 45 IMDEX Annual Report 2024 GROWTH STRATEGY AND FY25 FOCUS AREAS FY25 Focus Areas Safety culture Employee engagement Capability development Diversity, Equity & Inclusion Devico revenue synergies including directional drilling Integrated solutions Disciplined product development Systems that enable IMDEX to scale efficiently, securely, and sustainably Build on the success of the Global Digital Revenue system through extension to our fluids business Enhancing systems for ESG related data capture and assurance Scaling software Collaboration with Krux and Datarock Additional installed sites and units within IMT portfolio Continuing to execute on strategic initiatives Protecting and developing our people Investing in our core business growth Investing in digital 2.5 Investing in our digital and IMT business growth 46 IMDEX Annual Report 2024 Growth Strategy Our growth strategy for our core business is focused on technology leadership and delivering value through integrated solutions. For our new digital and IMT businesses, we are building geoscience analytics, AI and computer visualisation capabilities to enhance orebody knowledge for customers, while leveraging its core capabilities in the mining production market. Increasing the combination of our digital products and end-to-end solutions provides unparalleled orebody knowledge insights. Together, these strategic initiatives aim to increase SaaS revenue and provide greater exposure to less cyclical sectors of the mining value chain. 46 IMDEX Annual Report 2024 47 IMDEX Annual Report 2024 Increasing percentage of revenue from Digital Business Unit Increasing percentage of revenue from IMDEX Mining Technologies Business Unit Potential M&A and further industry collaboration Supply demand fundamentals Strengthening commodity prices Increasing exploration budgets and capital raisings Increased drilling activity supported by: IMDEX Growth Upside Market Growth Upside Growth Opportunities FY26+ Strategy Key indicators and growth drivers Growth of core and new business units Margin Expansion Driven by IMDEX Integrated solutions IMDEX’s expanded sensor stack Expansion of directional drilling globally IMDEX’s expanded presence in Europe, the US and Africa Growth of core business Maintaining technology leadership and increasing ARPU Increasing percentage of revenue from higher margin Sensors & Software Cost synergies achieved from Digital 2.5 Market Share Gains Building on geoscience analytics, AI and computer visualisation capabilities to enhance orebody knowledge for customers Building additional SaaS revenue for IMDEX Leveraging capabilities in larger adjacent market, where it is the same orebody and client Building additional mining production revenue, which is less subject to cyclical impacts Digital Business IMT Business Core Business Growth New Business Growth Targeted R&D to maintain market leadership and win market share Technology Leadership Solution Selling Focusing on optimised solutions rather than single products to maximise customer value and IMDEX sustainable revenue ACQUIRE, BUILD AND COLLABORATE 48 IMDEX Annual Report 2024 Directors' Report 49 IMDEX Annual Report 2024 49 IMDEX Annual Report 2024 50 IMDEX Annual Report 2024 The Directors of IMDEX Limited (“IMDEX” or “the Company”) present their report together with the annual Financial Report of the Company and its Subsidiaries (“the Group”) for the financial year ended 30 June 2024. In order to comply with the provisions of the Corporations Act 2001, the Directors report as follows: The names and particulars of the Directors of the Company during or since the end of the financial year are: Directors Name Role Particulars Mr. A. Wooles Independent, Non- Executive Chairman • Corporate Advisor and Executive • Director and Chairman since 1 July 2016 • Chair of the Remuneration and Nomination Committee • Member of the Audit, Risk and Compliance Committee • Has held executive and advisory roles in diverse industries including mining, oil and gas, power generation, manufacturing, telecommunications, food and beverages and retail • Non-Executive Director of High Peak Royalties Limited (ASX: HPR) (2012 – current) • Chairman of Bhagwan Marine (ASX: BWN) (2011 – current) Mr. P. House (appointed 1 March 2024) Managing Director • Managing Director and Chief Executive Officer • Fellow of the Australian Institute of Management • Graduate Member of Australian Institute of Company Directors • 30 years’ experience within the resources and technology sectors, with expertise in management, operations, strategy and governance across a wide range of markets around the world, including: The USA; Australia; Africa; India; the Middle East and Southeast Asia. • Currently a board member of Proteomics International Laboratories Ltd (ASX:PIQ) (2017 – current) Ms. S. Layman Independent, Non- Executive Director • Engineer and Certified Practising Accountant • Director since 6 February 2017 • Chair of the Audit, Risk and Compliance Committee and the Sustainability Committee • Member of the Australian Institute of Company Directors and CPA Australia • Extensive experience within the mining sector and financial markets with significant international and cross commodity experience. Previously Division Director – Metals & Energy Capital Division at Macquarie Bank Limited • Non-Executive Director of Pilbara Minerals Ltd (ASX: PLS) (2018 – current), Beach Energy Limited (ASX: BPT) (2019 – current) and Newmont Corporation (ASX: NEM) (2023 – current) Ms. T. Arlaud Independent, Non- Executive Director • Corporate Advisor • Director since 10 February 2021 • Member of the Sustainability Committee • Ms Arlaud is currently the Chief Executive Officer – Mining Specialist at IMB, Inc, Frisco in Colorado, USA. Prior to this role she was Regional Director Mining for the US and Western Canada/Mass Mining Lead (Globally) • Non-Executive Director of Global Atomic Corporation (TSX: GLO) (2020 – current), Seabridge Gold (TSX: SEA, NYSE:SA) (2021 – current) and IGO Limited (ASX: IGO) (2022 – current). 51 IMDEX Annual Report 2024 The following table sets out the number of Directors’ meetings (including meetings of committees of Directors) held during the financial year and the number of meetings attended by each Director (while they were a Director or committee member). Directors’ Meetings Board of Directors Audit, Risk and Compliance Committee Remuneration and Nomination Committee Sustainability Committee (Number) (Number) (Number) (Number) Held Attended Held Attended Held Attended Held Attended Mr. A. Wooles 7 7 5 5 4 4 N/A N/A Mr. P. House 2 2 N/A N/A N/A N/A N/A N/A Ms. S. Layman 7 7 5 5 N/A N/A 3 3 Ms. T. Arlaud 7 7 N/A N/A 4 4 3 3 Mr. U. Airhiavbere 7 7 5 5 N/A N/A 3 3 Ms. T. Horton 4 4 N/A N/A 2 2 N/A N/A Mr. I. Gustavino (retired 19 October 2023) 3 3 N/A N/A 2 2 N/A N/A Name Role Particulars Mr. U. Airhiavbere Independent, Non- Executive Director • MBA, MA, BA with Hon • Director since 19 December 2022 • Member of the Sustainability Committee and the Audit, Risk and Compliance Committee • Mr Airhiavbere is currently the Chief Commercial Officer, Worldwide Energy and Mining, for Microsoft Corporation, where he leads Microsoft’s end-to-end commercial strategy in the energy and mining industries. Prior to this role, he spent nine years with GE Oil & Gas in the roles of Senior Manager- Business Development, Business Unit Director and Director of Commercial Operations. • Non-Executive Director Christensen Inc. (2024 – current) Ms. T. Horton (appointed 13 November 2023) Independent, Non- Executive Director • MBA, BEc Hons • Director since 13 November 2023 • Ms Horton is currently a board member of ASX-listed companies IDP Education Ltd (ASX: IEL) (2022-current) and the GPT Group (ASX: GPT) (2019-current), chair of both companies’ People and Remuneration Committees and is a member of GPT’s Sustainability & Risk Committee. Mr. I. Gustavino (retired 19 October 2023) Independent, Non- Executive Director • Corporate Advisor • Director since 3 July 2015, retired on 19 October 2023 • Member of the Remuneration and Nomination Committee • Prior to his role as a corporate advisor, Mr. Gustavino was a co-founding shareholder and Director of Surpac Software, now Dassault Systèmes GEOVIA Inc. • Non-Executive Chairman of CV Check Limited (ASX: CV1) (2018 – current) 52 IMDEX Annual Report 2024 Mr. M. Tomasz Mr. Tomasz joined IMDEX in May 2021 and was appointed as Company Secretary effective from 24 May 2021. He is admitted as a barrister and solicitor in the Supreme Court of New South Wales and admitted as a Solicitor in England & Wales. He has experience in both corporate and commercial law gained from a variety of multinational resource and industrial conglomerate companies. Principal Activities IMDEX is a leading global mining- tech company that enables resource companies and drilling contractors to safely find, define, and mine orebodies with precision, confidence, and at speed. The Company’s product offering includes an integrated range of drilling optimisation products, cloud-connected rock knowledge sensors, and data and analytical software. This combined product offering is commodity agnostic and can be applied across the mining value chain. During FY24, IMDEX supported clients in more than 100 countries. The Company partners with drilling contractors and resource companies to provide integrated offerings that unlock greater productivity and provide critical insights. IMDEX has facilities in all key mining regions of the world. Its head office is in Balcatta, Western Australia. During FY24, IMDEX completed the operational integration of Devico, including its four facilities and a world-class R&D and manufacturing facility in Trondheim, Norway. This facility and its team of engineers complement the Company’s existing capabilities in California and Australia. There were no significant changes in the state of affairs of the Group. On 7 March 2024, IMDEX announced it had received the benefit of a determination by the Federal Court in case NSD 1089/2016 where Globaltech Corporation Pty Ltd (Globaltech) was ordered to pay AU$7.96m (excluding legal costs) to IMDEX subsidiary, Australian Mud Company Pty Ltd. The acquisition of Devico significantly strengthens IMDEX’s core business and global presence, particularly in Europe. Review of Operations A review of the operations of the consolidated entity during the financial year and of the results of those operations is contained in the Annual Report. Company Secretary Operations Review The following dividends have been paid by the Company or declared by the Directors since the commencement of the financial year ended 30 June 2024: FY23 fully-franked final dividend of 2.1 cents (2022: 1.9 cents) per share paid on 12 October 2023; FY24 fully-franked interim dividend of 1.5 cents (2023: 1.5 cents) per share paid on 28 March 2024; and FY24 fully-franked final dividend of 1.3 cents (2023: 2.1 cents) per share to be paid on 10 October 2024. I. II. III. Dividends Changes in State of Affairs Subsequent Events 53 IMDEX Annual Report 2024 On 15 April 2024, IMDEX announced that Globaltech had been placed into voluntary administration on 12 April 2024. As a result of the voluntary administration process, IMDEX entered into a deed of company administration (DOCA) with the Administrators on 31 July 2024. This DOCA was subsequently challenged by a number of Boart Longyear companies, with the court scheduling a hearing in mid-October to determine the outcome of the challenge. On 16 August 2024, the parties agreed to settle all of the global disputes and have entered into a binding settlement agreement which includes transfer of certain intellectual property to Imdex; new supply agreements between the parties; and a $10m payment to IMDEX. As a result, all global proceedings commenced by either party, including those in Canada, Australia and South Africa will be discontinued or brought to a final determination without any order for compensation and Boart Longyear will drop the challenge to, and agree to support, IMDEX’s DOCA for Globaltech. In addition to the above, and subject to IMDEX’s DOCA being finalised, all of Globaltech’s patents and trademarks will be incorporated as part of IMDEX’s intellectual property portfolio. Other than the events disclosed above, there have been no matters or circumstances that have arisen since the end of the financial year that have significantly affected, or may significantly affect, the operations of the Group, the result of these operations, or the state of affairs of the Group in future financial years. Details of amounts paid or payable to the auditor for non-audit services provided during the year are outlined in note 5.8 to the financial statements. The Directors are satisfied that the provision of non- audit services, during the year, by the auditor (or by another person or firm on the auditor’s behalf) is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are of the opinion that the fees paid for services provided as disclosed in note 5.8 to the financial statements do not compromise the external auditor’s independence, based on advice received from the Audit, Risk and Compliance Committee, for the following reasons: • All non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the auditor, and Non-audit Services Environmental Regulations The only entity in the Group that is subject to environmental regulations is Samchem Drilling Fluids and Chemicals (Pty) Ltd. They are required to comply with the South African National Water Act, Act No 36 of 1998 which requires the management of effluent discharge. This is controlled through an effluent system. During the current period, IMDEX have not had any reports of environmental regulatory non-compliance globally. More specific details about IMDEX’s sustainability initiatives and performance, including safety, health and environment, can be found here. 54 IMDEX Annual Report 2024 The auditor’s independence declaration is included in the Annual Report immediately prior to the Auditor’s Report. During the financial year, the Company paid a premium in respect of a contract insuring the Directors of the Company, the Company Secretary, and all Executive Officers of the Company and of any related body corporate against a liability incurred as such by a Director, Secretary or Executive Officer to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. The Company has not otherwise, during or since the end of the financial year, except to the extent permitted by law, indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate against a liability incurred as such an officer or auditor. • None of the services undermine the general principles relating to auditor independence as set out in Code of Conduct APES 110 Code of Ethics for Professional Accountants (including Independence Standards) issued by the Accounting Professional & Ethical Standards Board, including reviewing or auditing the auditor’s own work, acting in a management or decision- making capacity for the Company, acting as an advocate for the Company or jointly sharing economic risks and rewards. Auditor’s Independence Declaration Indemnification of Officers and Auditors The amounts contained in the financial report have been rounded to the nearest $1,000 (where rounding is applicable) where noted ($’000) under the option available to the Company under ASIC Corporations (Rounding in Financial/ Directors’ Reports) Instrument 2016/191. The Company is an entity to which this legislative instrument applies. The Australian Securities Exchange Corporate Governance Council sets out best practice recommendations, including corporate governance practices and suggested disclosures (ASX Recommendations). ASX Listing Rule 4.10.3 requires companies to disclose the extent to which they have complied with the ASX Recommendations and to give reasons for not following them. Unless otherwise indicated, the ASX Recommendations including corporate governance practices and suggested disclosures have been adopted by IMDEX for the full year ended 30 June 2024. In addition, the Company has a Corporate Governance section on its website: imdex.com (under the “Investors & ESG” heading) which includes the relevant documentation suggested by the ASX Recommendations. The IMDEX Group’s Corporate Governance Statement (Statement) for the financial year ended 30 June 2024 is dated as at 30 June 2024 and was approved by the Board of IMDEX (Board) on 20 August 2024. The extent to which IMDEX has complied with the ASX Recommendations during the year ended 30 June 2024, and the main corporate governance practices in place can be viewed in the Corporate Governance section on the Company website. Rounding Off of Amounts ASX Governance Principles and ASX Recommendations 55 IMDEX Annual Report 2024 55 IMDEX Annual Report 2024 Devico DeviDrill™ 56 IMDEX Annual Report 2024 Remuneration Report 57 IMDEX Annual Report 2024 57 IMDEX Annual Report 2024 IMDEX ACTx™ IMDEX LIMITED and its controlled entities DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2024 Remuneration Report (Audited) This Remuneration Report for the year ended 30 June 2024 outlines the remuneration arrangements of the Company in accordance with the requirements of the Corporations Act 2001 (the Act) and its regulations. This information has been audited as required by section 308(3C) of the Act. The report is presented under the following sections: 1. Introduction 2. FY24 highlights and looking forward to FY25 3. Remuneration Governance 4. Executive Remuneration Arrangements A. Remuneration principles and strategy B. Approach to setting remuneration and details of incentive plans C. Executive contracts 5. Executive Remuneration Outcomes for FY24 6. Non-Executive Director Remuneration 7. Additional Disclosures Relating to Options and Shares 8. Other Transactions 1. Introduction The Remuneration Report details the remuneration arrangements for Key Management Personnel (KMP) who are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company, directly or indirectly, including any Director (whether executive or otherwise) of the Company. The table below details the KMP of the Company during FY24. Each was a KMP for the entire period unless otherwise stated. For the purposes of this report, the term “Executive KMP” includes the Senior Executives of the Company. Non-Executive Directors (NEDs) Mr A. Wooles Non-Executive Chair Mr I. Gustavino Non-Executive Director (ceased 19 October 2023) Ms S. Layman Non-Executive Director Ms T. Arlaud Non-Executive Director Mr U. Airhiavbere Non-Executive Director Ms T. Horton Non-Executive Director (appointed 13 November 2023) Executive KMP Mr P. House1 Managing Director and Chief Executive Officer (MD & CEO) Mr P. Evans2 Chief Financial Officer (CFO) Mr S. Southwell Chief Operating Officer (COO) Dr M. Carey Chief of Strategy (COS) Mr M. Tomasz General Counsel and Company Secretary 1 Mr House was previously Chief Executive Officer and was appointed Managing Director & Chief Executive Officer effective from 1 March 2024 2 Mr Evans announced his intention to step down as Chief Financial Officer effective by the end of calendar year 2024 58 IMDEX LIMITED and its controlled entities DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2024 59 2. FY24 highlights Executive fixed remuneration 6.7% average increase An executive remuneration review was conducted whereby each incumbent’s remuneration was assessed against relevant external market comparators, together with individual performance, role complexity and internal relativity. As a result, the MD & CEO’s base salary increased 8.75% from $800,000 to $870,000 per annum during FY24 in recognition of external market conditions and growing role complexity. Other Executive KMP received annual base salary increases ranging from 4.2% to 8.9%. See Section 5 Statutory Remuneration for Executive KMP for more details. Short-term incentive (“STI”) outcomes 0% of maximum In FY24, the EBITDA Gateway was not achieved and no funding of the Profit Share Pool resulted for this period. Consequently, no FY24 STI was awarded to Executive KMP. See Section 5 Executive Remuneration Outcomes for FY24 for more details. Long-term incentive (“LTI”) outcomes 55% of maximum The 2021 LTI (FY22) three-year performance period ended on 30 June 2024. As a result of performance testing, the Board approved vesting of this award at 55% based on assessment against the following performance hurdles: • Relative Total Shareholder Return (TSR) • Absolute Earnings Per Share (EPS) • Strategic milestones Regarding the prior year 2020 LTI (FY21) award, final vesting of 58% was confirmed in September 2023. This outcome reflects IMDEX performance of 103% TSR growth and 113% EPS growth (normalised) over the 3 year period ending 30 June 2023. See Section 5 Executive Remuneration Outcomes for FY24 for more details. FY24 Non-Executive Directors (NEDs) remuneration 0% increase During FY24 the Board reviewed the NED fee structure (including policy base and committee fees) considering relevant benchmarking data and responsibilities of individual members. As a result, it was determined no increases to NED fees were required. Note the aggregate NED fee pool of $950,000 (as approved by shareholders at the 2021 AGM) remained unchanged. See Section 6 for disclosures regarding our NEDs. Changes to Executive Remuneration in FY24 FY24 One-off Performance Based New Business Integration Incentive (NBII) In order to support the successful integration of the investments made by IMDEX in new business opportunities, a ‘one-off’ long term incentive with service and performance based vesting conditions was granted to a limited number of select executives of the Company including the MD & CEO1. It is important to note that two thirds of grant is subject to performance criteria relating to IMDEX share price performance which delivers a tangible realised return to shareholders. To illustrate, by achieving the maximum IMDEX share price hurdle of $3.00 (a 64% uplift on the 30 June 2023 five day VWAP of $1.83), shareholders will realise an additional greater than $590 million market capitalisation, of which the NBII granted to Executive KMP would represent less than 1%. 1 Note at the time of the NBII grant Mr House was the Chief Executive Officer (appointed to Managing Director and Chief Executive Officer effective from 1 March 2024). The NBII grant and vesting conditions are summarised below. Performance Period 1 July 2023 – 30 June 2026 (3 years) Award Vehicle Performance rights (Rights) which convert to IMDEX ordinary shares upon vesting. IMDEX LIMITED and its controlled entities DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2024 60 Opportunity Subject to Vesting Conditions, all Executives including the MD & CEO may receive up to a maximum of 150% of base salary. Vesting Conditions Tranche 1: One third of grant subject to continued employment. Tranche 2: Two thirds of grant subject to performance criteria relating to IMDEX share price hurdles and continued employment. Vesting Criteria Tranche 1: The Executive must be employed with IMDEX at the time the Rights have vested. Tranche 2: IMDEX share price2 hurdles with vesting in accordance with the schedule below and continued employment with IMDEX at the time the Rights have vested. IMD share price2 Vesting Below $2.50 0% At or above $2.50 50% At or above $3.00 100% In addition to the vesting criteria above, the individual performance of the Executive must be at minimum ‘meeting all expectations’’ as evaluated each year throughout the performance period. Cessation of employment The grant of any Shares is subject to the Executive remaining a Company employee at that time the Performance Rights have vested along with compliance with the requirements of the Plan. If the Executive ceases to be an employee before that date (the Performance Rights have vested and become exerciseable), their Performance Rights will automatically lapse and be forfeited unless and to the extent the Board otherwise determines in accordance with the Plan. The Board retains its absolute discretion to determine whether to apply a Qualifying Reason in accordance with the Plan. 2 The IMDEX share price is based on the average closing price for the three calendar months up to and including the final day of the performance period. It is important to note that this grant does not represent an ongoing component of the IMDEX Executive Remuneration package. After detailed consideration, the grant was determined by the Board to be an effective means of ensuring that shareholder value ensuing from the investment by the Company in new business opportunities is protected and maximised. The NBII is designed to ensure longer term alignment between IMDEX’s Executives, the new business operations being integrated and the interests of shareholders of our Company. Looking forward to FY25 IMDEX continues to grow in size, complexity and global reach. Similarly, the talent across our global workforce is increasingly sourced from a wide variety of backgrounds and organisations with IMDEX seen as an attractive source for highly skilled leadership. The overall employee value proposition is therefore critical to the attraction and retention of our global workforce and executives, of which the remuneration offering must remain contemporary. As foreshadowed in last year’s Remuneration Report, we continue to strengthen the link between our strategy and the Executive Remuneration Framework. In consideration of the annual review process and external market benchmarking, for FY25 the MD & CEO’s fixed remuneration will increase to $910,000 (4.6% increase), STI opportunity increases to 75% of base salary (previously 50%) and the current LTI opportunity of 100% of base salary remains unchanged. Other Executive KMP’s will receive annual base salary increases ranging from 4.0% to 5.2%, STI opportunity increases to 50% of base salary (previously 35%) and the current LTI opportunity of 70% of base salary remains unchanged. We will continue to work through further opportunities for change over the coming year. This includes ongoing consideration for minimum shareholding guidelines in the context of ASX market practices and recognising implications for individual Board members and Executives residing in overseas locations. The Board welcomes ongoing shareholder feedback to ensure IMDEX’s remuneration practices remain appropriate. IMDEX LIMITED and its controlled entities DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2024 61 3. Remuneration Governance Remuneration and Nomination Committee The Remuneration and Nomination Committee (the Committee) comprises three independent NEDs. The Committee has delegated decision making authority for some matters related to the remuneration arrangements for NEDs and Executives and is required to make recommendations to the Board on other matters. Specifically, the Board approves the remuneration arrangements of the MD & CEO and other Executives, and all awards made under the short-term incentive (STI) and long-term incentive (LTI) plans, following recommendations from the Committee. The Board also sets the aggregate remuneration of NEDs, which is then subject to shareholder approval, and NED fee levels. The Committee approves the level of the STI pool, having regard to the recommendations made by the MD & CEO. The Committee meets regularly through the year. The MD & CEO attends certain Committee meetings by invitation, where the input of Management is required and is not present during any discussions related to his own remuneration arrangements. Further information on the Committee’s role, responsibilities and membership is available at www.imdex.com Stakeholder consultation As part of the Board’s commitment to good governance, the Committee considers the views of shareholders and other key stakeholders when setting the remuneration framework and / or determining remuneration outcomes for the KMP. Each year the Committee proactively undertakes consultation with institutional shareholders and proxy advisors on remuneration and governance matters. Feedback from stakeholders is considered and used as a key input into decision-making by the Board / Committee for continuous improvement ensuring the appropriateness of KMP remuneration arrangements. The Board / Committee considers the stakeholder consultation approach provides a robust mechanism to inform decisions and outcomes that are in the interests of the Company and its shareholders. Use of remuneration consultants To ensure the Committee is fully informed when making remuneration decisions, it seeks external remuneration advice. Remuneration consultants are engaged by, and report directly to the Committee. In selecting remuneration consultants, the Committee considers potential conflicts of interest and requires independence from the Company’s KMP and other Executives as part of their terms of engagement. During the financial year, the Committee engaged: • The Reward Practice Pty Ltd (TRP) as remuneration consultants to provide remuneration services in respect to the provision of incentive market insights and remuneration report drafting with a total fee of $48,000 for these services. • Willis Towers Watson (WTW) as remuneration consultants to provide remuneration services in respect to external benchmarking with a total fee of $38,000 for these services. During the period no remuneration recommendations, as defined by the Corporations Act, were provided by TRP or WTW. Remuneration report approval at 2023 AGM The FY23 Remuneration Report received strong shareholder support at the 2023 AGM with a vote of 99.54% in favour. This demonstrates ongoing shareholder support and confidence in the Company’s remuneration approach for KMP. IMDEX LIMITED and its controlled entities DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2024 62 4. Executive Remuneration Arrangements 4A: Remuneration principles and strategy IMDEX’s Executive remuneration strategy is designed to attract, motivate and retain high performing individuals and align the interests of Executives and shareholders. The following diagram illustrates how the Company’s remuneration strategy aligns with the strategic direction and links remuneration outcomes to performance. Business Objective Providing leading mining solutions to enhance the productivity and efficiency of our clients’ operations across the mining value chain. How our Remuneration Strategy links to our Business Objective Align the interests of Executives with our shareholders • The Remuneration Framework incorporates “at-risk” components, including both short and longer term elements, delivered in cash and equity; and • Performance is assessed against financial and non- financial measures, which are linked to IMDEX’s increased growth and profitability and hence, shareholder value. Attract, motivate and retain high performing individuals • The remuneration offering is competitive for companies of a similar size and complexity; and • Longer-term elements encourage retention. Remuneration Component Vehicle Purpose Link to Performance Base Salary Comprises cash base salary only. To provide a competitive base salary set with reference to the role, location and experience. Company and individual performance considered during the annual remuneration review. Superannuation/Pension Compulsory superannuation/ pension contributions plus other cash and non-cash benefits. To meet statutory requirements and provide benefits commensurate with role, location and experience. Benefits are considered during the annual remuneration review. STI Half the award is paid in cash and half is granted as deferred performance rights. Focusses the efforts and rewards Executives for their contribution to achieving outcomes that are a priority for the Company in the financial year. The deferred component is consistent with prevalent Australian market practice and encourages executive share ownership and supports alignment with the shareholder experience over the medium term. EBITDA is the key financial metric. Also linked to other internal measures including safety, customer service, implementation of key growth initiatives, risk management, IMDEX values and people and capability. Mandatory Compliance and Safety training completion is also required. LTI Awards are made in the form of performance rights. Rewards Executives for their contribution to the creation of shareholder value over the longer term. Vesting of awards is dependent on Total Shareholder Return (TSR) performance relative to a peer group of companies, Absolute Earnings Per Share (EPS) and the achievement of long-term strategic milestones. IMDEX LIMITED and its controlled entities DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2024 63 4B: Approach to setting remuneration and details of incentive plans In FY24, the Executive remuneration framework consisted of base salary and short and long-term incentives as outlined below. Overall remuneration level and mix How is overall remuneration and mix determined? Remuneration levels are considered annually through a review that considers comparative market data, the performance of the Company and individual, and the broader economic environment. The Company aims to reward Executives with a level and mix (proportion of base salary and other benefits, short term incentives and long-term incentives) of remuneration appropriate to their position, responsibilities, and performance within the Company and that which is aligned with targeted market comparators. Comparative companies are based on the following: • Industry peers with similar market capitalisation; • Mining, Equipment, Technology and Services companies with comparable market capitalisation; and • Other industry companies with which IMDEX competes for talent. The Company’s policy is to position Executives base salary around the 62.5 percentile of its targeted market comparators. The chart below summarises the MD & CEO and other Executive KMPs’ remuneration mix based on maximum opportunity for Fixed Remuneration (base salary plus superannuation), STI and LTI. The mix is considered appropriate for IMDEX based on market relativity and alignment to the Company’s short term and long-term strategic imperatives. Base salary and other benefits How is base salary and other benefits reviewed and approved? Base salary and other benefits are reviewed annually utilising benchmarked remuneration data. Any changes in remuneration for Executives are subject to approval from the Board considering recommendations from the Remuneration and Nomination Committee. Short Term Incentives What is the STI plan? The Company operates an annual STI program that is available to Executives subject to the attainment of clearly defined Company and individual financial and non-financial measures. Actual STI payments awarded to each Executive depend on the extent to which performance criteria set at the beginning of the financial year are met. Half of any STI award is paid in cash and half is delivered as deferred performance rights (Rights) which may vest after 12 months subject to continued employment. 40% 49% 20% 17% 40% 34% MD Executives Fixed STI LTI IMDEX LIMITED and its controlled entities DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2024 64 What are the performance criteria and how do they align with business performance? The performance criteria consist of several Key Performance Indicators (KPIs) covering financial and non-financial, corporate, and business unit measures of performance which are focussed on key performance drivers for the business. Within each KPI, stretch objectives are set. Executives will only be eligible for a payment to the extent that the overarching EBITDA Gate is met or exceeded and 100% of mandatory compliance and safety training is completed. EBITDA is considered a key measure against which Management and the Board assess the short-term financial performance of the Company. Targets are set based on budget, adequacy of challenge and business objectives. Targets reflect business expectations at that time and may vary from prior year performance depending on economic and market conditions. The targets and outcomes may be adjusted (up or down) to exclude the impacts of uncontrollable items such as fair value gains on deferred consideration and gains on sale of investment. The performance criteria and weightings are summarised as follows: Performance Criteria Weighting Detail of Measures Corporate 50% Based on Group EBITDA outcomes* versus target Safety 20% Based on Group TRIFR versus target Individual Performance 30% Based on key measures identified annually for the executive and assessed against expectations for the role. A combination of scores assessed for executives based on individual goals relating to: • Customer Focus and Technical Leadership • Operational Excellence & Quality • Risk, Compliance & Safety • People & Capability • IMDEX Values • Strategic Initiatives As part of the assessment, the participant will be considered against the IMDEX values as part of determining final outcomes. *To provide an accurate representation of the Company’s ongoing operational performance and to ensure employee rewards align with sustainable short-term value creation, any unbudgeted non-recurring or non- operational events or transactions that are not expected to occur regularly or are unrelated to the underlying operating activities of the company (i.e. "One-off" or “Individually Significant Items”) such as, gains or losses from business and asset acquisitions, and significant litigation settlements may be excluded from the EBITDA calculation. What is the value of the STI award opportunity? The MD & CEO has a maximum STI opportunity of 50% of base salary. Other Executives have a maximum STI opportunity of up to 35% of base salary if the EBITDA Gate is exceeded and all the stretch targets are met. How are STI payouts determined? On an annual basis, after consideration of performance against KPIs (including satisfying the EBITDA Gate and 100% completion of the mandatory Compliance and Safety training), the Board in line with their responsibilities, determine the amount (if any) of the STI to be paid to each Executive, seeking recommendations from the MD & CEO as appropriate. The use of the EBITDA Gate ensures that the STI payouts are affordable to the business and are capped at the sum of the individual’s maximum opportunity. IMDEX LIMITED and its controlled entities DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2024 65 What happens to STI awards on cessation of employment? If an Executive ceases employment before the end of the financial year, generally no STI is awarded for that year subject to overarching Board discretion. Where a participant ceases employment prior to the deferred portion of their STI award vesting due to resignation or for cause, the Rights will be forfeited. Where a participant ceases employment due to a qualifying reason (death, total and permanent disability, retirement, or redundancy), then vesting will be determined based on the amount of performance period remaining and subject to Board discretion. Long Term Incentives What is the LTI plan? Under the LTI plan, annual grants of performance rights (Rights) are made to Executives to align remuneration with creation of shareholder value over the long-term. How much can Executives earn? The number of Rights granted is calculated on a Face Value basis. The MD & CEO has a maximum LTI opportunity of 100% of base salary. Other Executives have a maximum LTI opportunity of 70% of base salary. Executives are not eligible to receive dividends, or dividend equivalent payments on unvested Rights. How is performance measured? Awards are subject to three measures, weighted as follows: 1) Relative TSR 2) Absolute EPS 3) Strategic Milestones Weighting 50% 20% 30% Purpose To recognise the creation of shareholder value relative to market peers To recognise profitable growth over the long term To recognise the achievement of strategic milestones over the long-term The calculation of each performance measure is outlined below: 1) Relative TSR IMDEX’s TSR is measured relative to a comparator group of ASX-listed companies comprising the ASX300 Resources Index. These companies were chosen as they are of similar size and reflect the Company’s competitors for capital. The TSR for IMDEX and comparator companies is measured over three financial years (e.g., 1 July 2023 to 30 June 2026 for the FY24 LTI grant). Relative TSR measures the percentage change in a company’s share price, plus the value of dividends received during the period, assuming that all those dividends are reinvested into new shares. The proportion of Rights that may vest based on relative TSR performance is determined based on a ranking approach. The TSR for IMDEX and each company in the comparator group is measured and the companies are ranked by their TSR performance with vesting based on the following schedule: TSR percentile ranking of IMDEX TSR Portion of LTI that vests (50%) Below the 50th percentile Nil vesting At the 50th percentile 50% Between the 50th percentile and 75th percentile Pro-rata At or above the 75th percentile 100% IMDEX LIMITED and its controlled entities DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2024 66 Note: Notwithstanding the percentile ranking, no vesting will occur for the relative TSR portion where IMDEX’s TSR for the Performance Period is negative. How is performance measured? (continued) 2) Absolute EPS EPS growth targets are set by the Board at the time of the LTI grant. EPS compound annual growth rate (CAGR) performance determines the proportion of rights that may vest relative to absolute EPS as follows: EPS CAGR EPS Portion of LTI that vests (20%) Below 10% Nil vesting 10% 50% Between 10% and 15% Pro-rata At or above 15% 100% 3) Strategic Milestones Strategic milestones and associated measures relating to IMDEX’s long-term objectives are set by the Board at the time of the LTI grant. Each strategic milestone is assessed over the three-year performance period with annual progress reviews undertaken between Management and the Board. Due to the sensitive nature of the initiatives related to the strategic milestones, outcomes will be provided in the remuneration report following the conclusion of the performance period. When is performance measured? The performance measures are tested at the end of the three-year performance period to determine the number of Rights that vest. There is no opportunity for re-testing. Rights will lapse if the performance measures are not met at the end of the performance period. What happens on cessation of employment? Where a participant ceases employment prior to their award vesting due to resignation or termination for cause, all Rights will be forfeited. Where a participant ceases employment due to a qualifying reason (death, total and permanent disability, retirement, or redundancy), then vesting will be determined based on the amount of performance period remaining and subject to Board discretion. What happens if there is a change in control? In these circumstances, vesting will be determined at the discretion of the Board. 4C: Executive contracts Remuneration arrangements for KMP are formalised in employment agreements. The following outlines the details of contracts with KMP. MD & CEO – Mr Paul House Mr. House is employed under an ongoing contract, which can be terminated with notice by either side. Under the terms of the FY24 contract: • Mr House receives a base salary of $870,000 per annum. • A maximum STI opportunity of 50% of base salary. • Eligibility to participate in the IMDEX LTI plan on terms determined by the Board. Maximum opportunity is 100% of base salary. Termination provisions Termination provisions specify that the MD & CEO or the Company may terminate the agreement without cause by giving 6 months’ written notice. In addition to payment for accrued but untaken annual and long service leave, an additional payment of 4 months’ base salary is payable on termination by the Company where termination is affected without cause on 6 months’ notice, inclusive of any redundancy payment payable to the MD & CEO. The Company may IMDEX LIMITED and its controlled entities DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2024 67 otherwise terminate the contract on 3 months’ notice (due to illness or incapacity), 1 month’s notice (for misconduct) or no notice (if engaged in criminal activity which brings the Company into disrepute). IMDEX can make a payment in lieu of notice for all or some of the applicable notice period. All other Executives are employed on individual open-ended employment contracts that set out the terms of their employment. The termination provisions for other Executives are as follows: Reason Notice period Payment in lieu of notice Treatment of STI on termination Treatment of LTI on termination Resignation Up to 6 months Up to 6 months Unvested awards forfeited Unvested awards forfeited Termination for cause None None Unvested awards forfeited Unvested awards forfeited Termination in cases of death, disablement, redundancy, without cause Up to 6 months Up to 6 months Unvested awards forfeited subject to Board discretion Vesting will be determined based on the amount of performance period remaining and the Executive’s performance, subject to Board discretion. 5. Executive Remuneration Outcomes for FY24 Company performance A summary of IMDEX’s business performance as measured by a range of financial and other indicators, including disclosure required by the Corporations Act 2001, is outlined in the table below. Measure FY24 FY23 FY22 FY21 FY20 Revenue ($’000) 445,284 411,398 341,843 264,375 237,691 EBITDA ($’000) 112,880 100,514 101,987 78,418 58,072 Normalised EBITDA ($’000) 130,7211 122,5782 104,8582 75,5012 54,4472 Net profit before tax ($’000) 50,133 54,597 62,566 44,531 29,142 Net profit after tax ($’000) 32,399 34,995 44,711 31,667 21,758 Share price at start of year (cents) 189.5 184.5 204.0 111.0 131.0 Share price at end of year (cents) 2.220 189.5 184.5 204.0 111.0 Interim dividend (cents) – fully franked 1.5 1.5 1.5 1.0 1.0 Final dividend (cents) – fully franked 1.3 2.1 1.9 1.4 0.7 Special dividend (cents) – fully franked - - - 0.4 2.0 Basic earnings per share (cents) 6.36 7.95 11.28 8.01 5.64 Normalised basic earnings per share (cents) 9.241 12.012 11.852 7.272 4.702 Diluted earnings / (loss) per share (cents) 6.03 7.55 10.80 7.80 5.46 1 FY24 stated before $10.4m Devico integration and organisation design costs and $7.4m impairment loss on assets held for sale. 2 FY23 stated before $11.1m exceptional litigation costs relating to costs incurred in respect of international IP infringement matters, $10.6m Devico transaction and integration costs and $0.4m impairment loss on COREVIBE. FY22: a net expense of $2.9m impairment loss, being an impairment loss on COREVIBE IP, inventory and associated fixed assets of $14.1m offset by the related $11.2m estimated deferred consideration no longer payable; FY21: $2.9m gain on deferred consideration fair value adjustment for Flexidrill and AusSpec); FY20 $3.6m gain on VES sale. IMDEX LIMITED and its controlled entities DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2024 68 Short Term Incentives Company performance and its link to short-term incentives An STI payment will only be made to the extent that the overarching EBITDA Gate is met or exceeded and 100% of mandatory compliance and safety training is completed by the Executive. IMDEX’s actual EBITDA performance to budget target over the three financial years from 1 July 2021 to 30 June 2024: Mandatory Compliance and Safety training completion: Financial year EBITDA vs Gate Compliance and safety training programs 100% completed by all Executives. FY24 Not Achieved FY23 Exceeded FY22 Exceeded Performance in FY24 The table below sets out the STI measures for FY24 and performance outcomes against those measures. Under the STI, payments for Executives and senior management are 100% profit funded once the EBITDA target has been met. For FY24 the EBITDA target was not met resulting in nil STI payout for Executive KMP. Objective Weighting Performance Achieved/Comments Corporate 50% FY24 EBITDA of $112.6m was below the target set. Safety 20% FY24 TRIFR of 3.80 was above the target set. Individual 30% Outcomes for individual objectives for the year met or exceeded expectations. The following table outlines the STI outcomes for Executive KMP, including the proportion of maximum STI that was earned and forfeited in relation to FY24. Executive KMP Percentage of maximum STI Awarded Forfeited Mr P. House 0% 100% Mr P. Evans 0% 100% Mr S. Southwell 0% 100% Dr M. Carey 0% 100% Mr M. Tomasz 0% 100% Long Term Incentives Company performance and its link to long-term incentives The following chart shows the IMDEX share price movement relative to the performance of various index groups (that are relevant to IMDEX) over the last three years. IMDEX LIMITED and its controlled entities DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2024 69 LTI vesting for grants made prior to FY22 are driven by the Company’s TSR and EPS performance relative to the companies within the ASX 300 Resources Index peer group (assessed via a combined percentile rank). To move to a more market-aligned and balanced LTI assessment approach, from FY22 and onwards, LTI awards are based on performance against three independent, weighted performance areas that are linked to long-term shareholder wealth, profitability growth and strategic achievements (i.e., relative TSR, absolute EPS and strategic milestones). The following table provides a summary of LTI award vesting and shareholder-related performance over the past three years. FY22 LTI (vest 30 June 2024) FY21 LTI (vest 30 June 2023) FY20 LTI (vest 30 June 2022) Absolute TSR growth 20% 103% 142% Relative TSR ranking percentile (vs. peers) 50% 69% 82% Absolute EPS growth1 (2%)2 113%1 53% Relative EPS ranking percentile (vs. peers) NA 61% 57% LTI vesting3 55% 58% 65% 1 For comparison purposes, a point-to-point growth rate is used based on normalised EPS. 2 The EPS for the base year (i.e. FY21) has been adjusted to reflect the inclusion of Devico. This includes CY22 NPAT for Devico plus interest, amortisation and increase in the number IMDEX shares issued arising from the Devico acquisition. 3 LTI vesting for FY20 and FY21 grants is calculated using the combined percentile rank values based on both relative TSR and EPS outcomes. Following the assessment of performance hurdles for the FY22 LTI grant over the three years ended 30 June 2024, the Board approved a total of 55% vesting for Executive KMP in accordance with Plan Rules. The following outlines the assessment outcomes for the FY22 grants. -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 07/2021 08/2021 09/2021 10/2021 11/2021 12/2021 01/2022 02/2022 03/2022 04/2022 05/2022 06/2022 07/2022 08/2022 09/2022 10/2022 11/2022 12/2022 01/2023 02/2023 03/2023 04/2023 05/2023 06/2023 07/2023 08/2023 09/2023 10/2023 11/2023 12/2023 01/2024 02/2024 03/2024 04/2024 05/2024 06/2024 IMDEX 3 year share price movement performance vs comparison indexes Imdex ASX200 ASX300 ASX Small Ordinaries IMDEX LIMITED and its controlled entities DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2024 70 The following table summarises the FY22 LTI performance hurdles and outcomes for the performance period. LTI Hurdle (FY22) Performance outcomes Vesting outcome Further details Relative TSR (50%) Relative TSR (against the S&P/ASX300 Resources Index) 25% Assessed in line with Plan rules, IMDEX TSR (19.99%) for the period achieved a 50th percentile ranking against the comparator group. Absolute EPS (20%) Compound annual growth rate (CAGR) 0% Assessed in line with Plan rules, the vesting outcome reflects EPS CAGR for the period. Given that the EPS CAGR outcome for the period is less than 10%, the vesting outcome for this performance hurdle is zero. Strategic milestones (30%) Overall revenue gateway. Qualitative assessment of each individual strategic milestone 30% Overall strategic gateway related to transformational (non-core) revenue exceeded. Contributing to this the Board assessed the individual strategic milestones set out below as meeting or exceeding target outcomes which collectively provided a 100% vesting outcome for this performance hurdle. • Significant progress towards establishing a material presence in the mining production market. • Evolved the digital rock knowledge business offering. • Advanced the Drilling Optimisation business model. Total vesting outcome: 55% 50th 75th 0% 0th 15% 10% 100% IMDEX LIMITED and its controlled entities DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2024 71 Statutory Remuneration for Executive KMP The following table sets out total remuneration for Executive KMP in FY24 and FY23, calculated in accordance with statutory accounting requirements. Short-term benefits Other Long-term Benefits2 Leave Post-employment Benefits LTIP Share- based payments3 Termination Benefits Total % Performance related Executive KMP Year Cash Salary Bonus1 Non-monetary5 Other Super Other Mr P. House 4 FY24 870,000 0 42,801 28,797 27,500 - 987,876 - 1,956,974 50% FY23 800,000 200,000 69,789 - 27,874 27,500 - 350,529 - 1,475,692 37% Mr P. Evans FY24 500,000 0 (12,921) 16,923 27,500 - 261,463 - 792,965 33% FY23 480,000 84,000 34,893 - 13,093 27,500 - 81,730 - 721,216 23% Mr S. Southwell FY24 580,000 0 1,741 18,786 27,500 - 335,281 - 963,308 35% FY23 550,000 96,250 4,505 - 15,759 27,500 - 157,589 - 851,603 30% Dr M. Carey FY24 510,000 0 (6,772) 16,135 27,500 - 250,704 - 797,567 31% FY23 480,000 94,080 24,584 1,886 16,559 27,500 - 85,489 - 730,098 25% Mr M. Tomasz FY24 490,000 0 10,621 8,097 27,500 - 373,646 - 909,864 41% FY23 450,000 78,750 5,738 - 3,861 27,500 - 158,312 - 724,161 33% Totals FY24 2,950,000 0 35,470 - 88,738 137,500 - 2,208,970 - 5,420,678 41% FY23 2,760,000 553,080 139,509 1,886 77,146 137,500 - 833,649 - 4,502,770 31% 1. 50% of any STI will be paid in cash after the end of the performance period. The remaining 50% will be awarded as deferred Rights to IMDEX Limited shares. 2. Other long-term benefits are the accounting expense of long-service leave movements in FY24. 3. LTIP Share-based payments are calculated in accordance with Australian Accounting Standards and are the amortised fair value of equity-related awards that have been granted to Executives. 4. Mr House elected, and the Board agreed to defer his entire FY21 award into Rights to IMDEX Limited shares. The Rights were deferred for three years, vesting in 2024 and are subject to continued service. The Board also resolved to match the deferred component of the award at the future vesting date, subject to Mr House’s continued service over the period. 5. The non-monetary benefits include the accounting expense of annual leave movement. IMDEX LIMITED and its controlled entities DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2024 72 6. Non-Executive Director Remuneration Remuneration policy The Board seeks to set aggregate remuneration at a level that provides the Company with the ability to attract and retain directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders. The amount of aggregate remuneration sought to be approved by shareholders and the fee structure is reviewed annually against fees paid to Non-Executive Directors of comparable ASX listed companies with similar market capitalisation of the Company, as well as similar sized industry comparators. The Board considers advice from external consultants when undertaking the annual review process. The Company’s constitution and the ASX listing rules specify that the NED fee pool shall be determined from time to time by a general meeting. The latest determination was at the 2021 AGM when shareholders approved an aggregate fee pool of $950,000 per annum. Structure The remuneration of NEDs consists of Director Fees and Committee Fees. The payment of additional fees for serving as a Chair on a committee recognises the additional time commitment required by NEDs who serve on sub-committees. To ensure independence, NEDs do not participate in any incentive schemes. The table below summarises the NED fee policy for FY24: Director Fees Board Chair $240,000 Non-Executive Directors $130,000 Committee Fees Committee Chair - Audit, Risk and Compliance Committee $30,000 Committee Chair – Remuneration & Nomination $30,000 Committee Chair - Sustainability $20,000 Committee Member $10,000 The remuneration of NEDs for FY24 and FY23 is detailed below. Non-Executive Director Year Short-term benefits Post-employment benefits Total Director Fees Committee Fees Superannuation Mr. A. Wooles FY24 240,000 30,000 - 270,000 FY23 234,615 28,654 - 263,269 Ms. S. Layman FY24 130,000 50,000 - 180,000 FY23 125,000 28,750 - 153,750 Mr. I. Gustavino1 FY24 39,394 3,030 - 42,424 FY23 119,299 7,263 5,939 132,501 Ms T. Arlaud FY24 130,000 20,000 - 150,000 FY23 125,000 5,615 - 130,615 Mr U Airhiavbere FY24 130,000 20,000 - 150,000 FY23 70,000 3,864 - 73,864 Ms. T. Horton2 FY24 77,750 5,288 5,284 88,322 FY23 - - - - Mr K. Dundo3 FY24 - - - - FY23 26,754 287 2,839 29,880 Totals FY24 747,144 128,319 5,284 880,747 FY23 700,668 74,433 8,778 783,879 1 Mr. I. Gustavino retired from the Board effective 19 October 2023. 2 Ms. T. Horton appointed to the NED effective 13 November 2023. 3 Mr. K.Dundo retired from the Board effective 6 October 2022. IMDEX LIMITED and its controlled entities DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2024 73 7. Additional Disclosures Relating to Options and Shares Performance Rights awarded, vested and lapsed during the year The following table sets out the Rights held by Executive KMP, including the movements in Rights held during FY24. Executive KMP Balance at start of period 1 July 2023 Granted as remuneration Performance Rights exercised Performance Rights lapsed/ forfeited Balance1 at end of period 30 June 2024 Mr P. House 1,428,537 1,241,135 (282,538) (134,247) 2,252,887 Mr P. Evans 534,618 623,022 (129,631) (63,039) 964,970 Mr S. Southwell 544,289 722,382 (120,480) (56,384) 1,089,807 Dr M. Carey 540,162 637,775 (137,887) (70,959) 969,091 Mr M. Tomasz 367,934 609,588 (36,269) 941,253 Total 3,415,540 3,833,902 (706,805) (324,629) 6,218,008 1. Includes Performance Rights held directly, indirectly and beneficially by Executives. KMP Shareholdings The table below details the number of shares held in IMDEX and the movement during FY24. Class of shares Balance at start of period 1 July 2023 Shares allocated under remuneration framework1 Net change Other Balance 1at end of period 30 June 2024 Number of Performance Rights2 not vested at year- end Non-Executive Directors Mr A. Wooles Ordinary 1,613,636 - (63,636) 1,550,000 - Ms S. Layman Ordinary 157,083 - - 157,083 - Mr I. Gustavino3 Ordinary 22,728 - - 22,728 - Ms. T. Horton Ordinary - - - - - Ms T. Arlaud Ordinary - - - - - Mr. U. Airhiavbere Ordinary - - 20,000 20,000 - Executive KMP Mr P. House Ordinary 914,403 282,538 260,000 1,456,941 2,252,887 Mr P. Evans Ordinary 691,608 129,631 (20,000) 801,239 964,970 Mr S. Southwell Ordinary 83,041 120,480 (23,152) 180,369 1,089,807 Dr M. Carey Ordinary 362,086 137,887 (110,000) 389,973 969,091 Mr M. Tomasz Ordinary - 36,269 (18,000) 18,269 941,253 Total 3,844,585 706,805 45,212 4,596,602 6,218,008 1. All shares were issued for nil consideration. 2. Includes Ordinary Shares and Performance Rights held directly, indirectly and beneficially by KMP. 3. Mr Gustavino retired from the Board 19 October 2023. Closing balance is at this date. 74 IMDEX Annual Report 2024 There are no other transactions and balances with key management personnel and their related parties. End of Remuneration Report. Signed in accordance with a resolution of the Directors made pursuant to S.298(2) of the Corporations Act 2001. On behalf of the Directors. 8. Other Transactions Anthony Wooles IMDEX Chairman PERTH, Western Australia, 20 August 2024 IMDEX Annual Report 2024 75 IMDEX Annual Report 2024 The Directors declare that: At the date of this declaration, the company is within the class of companies affected by ASIC Corporations (Wholly owned Companies) Instrument 2016/785. The nature of the deed of cross guarantee is such that each company which is party to the deed guarantees to each creditor payment in full of any debt in accordance with the deed of cross guarantee. In the directors’ opinion, there are reasonable grounds to believe that the Company and the companies to which ASIC Corporations (Wholly owned Companies) Instrument 2016/785 applies, as detailed in note 5.3 to the financial statements will, as a group, be able to meet any liabilities to which they are, or may become, subject because of the deed of cross guarantee. Signed in accordance with a resolution of the Directors made pursuant to s.295(5) of the Corporations Act 2001. Dated at PERTH, Western Australia, 20 August 2024. in the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; in the Directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the financial position and performance of the Group; in the Directors’ opinion, the financial statements and notes thereto are in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board, as stated in note 1.1 to the financial statements; the Directors have been given the declarations required by s.295A of the Corporations Act 2001; and in the Directors’ opinion, the attached consolidated entity disclosure statement is true and correct. A. B. C. D. E. Directors' Declaration Anthony Wooles IMDEX Chairman 86 IMDEX Annual Report 2024 Financial Report IMDEX Annual Report 2024 Devico DeviGyroOX™ 77 IMDEX Annual Report 2024 78 IMDEX Annual Report 2024 Contents Financial Statements Consolidated Statement of Profit or Loss and Other Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows 79 80 81 82 About this Report Other Assets & Liabilities Others Debt & Capital Operating Performance Basis of Presentation Basis of Consolidation Changes to Accounting Policies Critical Accounting Judgements and Key Sources of Estimation Uncertainty Trade and Other Receivables Inventories Property, Plant & Equipment Leases Intangible Assets Trade & Other Payables Provisions Investment in Associates Assets Classified as Held For Sale Taxation Acquisition of Subsidiaries/Assets Parent Entity & Subsidiary Information Reserves Contingent Assets & Liabilities Key Management Personnel Compensation Related Party Transactions Auditor’s Remuneration Subsequent Events Cash and cash equivalents Borrowings Issued Capital Financial Risk Management Commitments for Expenditure Earnings per Share Segment Information Revenue and Expenses Dividends Individually Significant Items Impairment Loss Net of Related Fair Value Adjustment 1.1 1.2 1.3 1.4 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 3.1 3.2 3.3 3.4 3.5 2.1 2.2 2.3 2.4 2.5 2.6 83 97 109 91 85 IMDEX LIMITED and its controlled entities CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2024 79 Year Ended Year Ended 30 June 2024 30 June 2023 Notes $’000 $’000 Continuing operations Revenue from sale of goods, rentals, services and software 2.3 445,284 411,398 Raw materials and consumables used (125,773) (128,093) Employee benefits expense 2.3 (126,789) (105,224) Depreciation and amortisation expense 2.3 (53,048) (41,188) Finance income 2,591 996 Finance costs 2.3 (12,290) (5,725) Impairment loss net of related fair value adjustment 2.6 (7,369) (372) Other expenses 2.3 (69,252) (75,523) Share of loss of associates 4.8 (3,221) (1,672) Profit before tax from continuing operations 50,133 54,597 Income tax expense 5.1 (17,734) (19,602) Profit for the period from continuing operations 32,399 34,995 Other comprehensive income Items that may be reclassified subsequently to profit or loss Exchange differences arising on the translation of foreign operations (9,697) 4,715 Other comprehensive income for the year, net of income tax (9,697) 4,715 Total comprehensive income for the year 22,702 39,710 Profit attributable to owners of the parent 32,399 34,995 Total comprehensive income attributable to owners of the parent 22,702 39,710 Earnings per share Basic profit per share (cents) 2.1 6.36 7.95 Diluted profit per share (cents) 2.1 6.03 7.55 The Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes. IMDEX LIMITED and its controlled entities CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2024 80 30 June 2024 30 June 2023(i) Notes $’000 $’000 Current assets Cash and cash equivalents 3.1 47,132 58,128 Trade and other receivables 4.1 90,646 90,072 Inventories 4.2 63,007 67,457 Current tax assets 5.1 4,915 6,981 Assets classified as held for sale 4.9 - 7,351 Other 11,503 11,346 Total current assets 217,203 241,335 Non-current assets Property, plant and equipment 4.3 56,568 57,876 Right-of-use assets 4.4 37,600 32,120 Intangible assets 4.5 414,466 426,843 Investment in associates 4.8 11,271 13,871 Deferred tax assets 5.1 44,837 34,410 Loans to associates 1,587 - Other 2,612 4,635 Total non-current assets 568,941 569,755 Total assets 786,144 811,090 Current liabilities Trade and other payables 4.6 43,902 46,823 Lease liabilities 4.4 5,795 5,789 Current tax liabilities 5.1 9,181 8,916 Borrowings 3.2 28,000 28,000 Provisions 4.7 8,275 7,973 Total current liabilities 95,153 97,501 Non-current liabilities Lease liabilities 4.4 39,720 32,511 Borrowings 3.2 54,138 95,048 Provisions 4.7 368 293 Deferred tax liabilities 5.1 25,488 29,529 Total non-current liabilities 119,714 157,381 Total liabilities 214,867 254,882 Net assets 571,277 556,208 Equity Issued capital 3.3 409,546 401,164 Reserves 5.4 13,348 20,680 Retained earnings 148,383 134,364 Total equity 571,277 556,208 The Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes. (i) The prior period amounts have been restated as a result of finalising the purchase price allocation for the Devico acquisition (refer to Note 5.2). IMDEX LIMITED and its controlled entities CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2024 81 Shares Reserved for Performance Rights Plan Foreign Currency Translation Reserve Share-based Payment Reserve Reserves Total Fully Paid Ordinary Shares Retained Earnings Total Attributable to Equity Holders of the Entity Notes $’000 $’000 $’000 $’000 $’000 $’000 $’000 Balance at 30 June 2022 (1,586) (3,041) 18,262 13,635 169,078 114,513 297,226 Exchange differences on translation of foreign operations after taxation - 4,715 - 4,715 - - 4,715 Profit for the year - - - - - 34,995 34,995 Total comprehensive income for the year - 4,715 - 4,715 - 34,995 39,710 Share based payments – performance rights 2.3 (906) - 9,076 8,170 - - 8,170 Tax effect on the share-based payments - - 943 943 - - 943 Settlement of performance rights - - (3,511) (3,511) - - (3,511) Share based payments – MinePortal 5.2 - - (3,272) (3,272) 3,272 - - Equity raising in relation to the acquisition of Devico AS 5.2 - - - - 215,824 - 215,824 Shares issued as partial consideration for the acquisition of Devico AS 5.2 - - - - 12,990 - 12,990 Dividends paid - - - - - (15,144) (15,144) Balance at 30 June 2023 (2,492) 1,674 21,498 20,680 401,164 134,364 556,208 Exchange differences on translation of foreign operations after taxation - (9,697) - (9,697) - - (9,697) Profit for the year - - - - - 32,399 32,399 Total comprehensive income for the year - (9,697) - (9,697) - 32,399 22,702 Share based payments – performance rights 2.3 (1,307) 11,498 10,191 - - 10,191 Tax effect on the share-based payments 556 556 - - 556 Settlement of performance rights - - (5,983) (5,983) 5,983 - - Share based payments – MinePortal 5.2 - - (2,399) (2,399) 2,399 - - Dividends paid - - - - - (18,380) (18,380) Balance at 30 June 2024 (3,799) (8,023) 25,170 13,348 409,546 148,383 571,277 The Statement of Changes in Equity should be read in conjunction with the accompanying notes. IMDEX LIMITED and its controlled entities CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2024 82 Year Ended Year Ended 30 June 2024 30 June 2023 Notes $’000 $’000 Cash flows from operating activities Receipts from customers 474,015 437,064 Payments to suppliers and employees (350,065) (333,015) Income tax paid (18,495) (22,539) Interest received 2,591 996 Net cash generated from operating activities 3.1 108,046 82,506 Cash flows from investing activities Payment for property, plant and equipment (29,323) (20,942) Payment for intangible assets (4,186) (6,213) Payment for deferred consideration - (3,308) Payment for acquisitions (net of cash acquired) - (305,295) Payment for the investment in associates (792) (10,367) Loans advanced to associates (1,595) - Net cash used in investing activities (35,896) (346,125) Cash flows from financing activities Repayment of borrowings (58,000) (15,910) Proceeds from borrowings, net of costs 14,837 117,079 Interest and other costs of finance paid (7,832) (3,202) Proceeds from issue of ordinary shares, net of costs - 215,824 Dividends paid (18,380) (15,144) Cash paid due to settlement of performance rights - (3,511) Repayment of lease liabilities (10,014) (9,275) Net cash provided by/(used) in financing activities (79,389) 285,861 Net increase/(decrease) in cash and cash equivalents (7,239) 22,242 Cash and cash equivalents at the beginning of the financial year 58,128 36,368 Effects of foreign exchange rate changes (3,757) (482) Cash and cash equivalents at the end of the financial year 3.1 47,132 58,128 The Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes. IMDEX LIMITED and its controlled entities ABOUT THIS REPORT 83 IMDEX Limited (the “Company”) is a listed public company, incorporated in Western Australia and along with its subsidiaries (collectively the “Group”) operates in Asia-Pacific, Africa / Europe and the Americas. For the purposes of preparing the consolidated financial statements, the Company is a for-profit entity. 1.1 Basis of Presentation The Financial Report has been prepared on the going concern basis and on the basis of historical cost. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted and accounting policies have been applied consistently in all periods presented. The amounts contained in the financial report have been rounded to the nearest $1,000 (where rounding is applicable) where noted ($’000) under the option available to the Company under ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191. The Company is an entity to which this legislative instrument applies. The Financial Report: • has been prepared in accordance with Australian Accounting Standards (AASBs), including Australian Accounting Interpretations adopted by the Australian Accounting Standards Board, and the Corporations Act 2001. The Financial Report of the Group also complies with International Financial Reporting Standards (IFRSs) and Interpretations as issued by the International Accounting Standards Board (IASB); • presents reclassified comparative information where appropriate to enhance comparability with the current period presentation. • adopts all new and amended Accounting Standards and Interpretations issued by the AASB that are relevant to the operations of the Group and effective for reporting periods beginning on or after 1 July 2023. Refer to note 1.3 for further details; • does not early adopt any Accounting Standards and Interpretations that have been issued or amended but are not yet effective, unless otherwise disclosed. Refer to note 1.3 for further details; and The financial statements were authorised for issue by the Directors on 20 August 2024. 1.2 Basis of Consolidation The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries). Control is achieved when the Company has power over an entity and is exposed to, or has rights over, the variable returns of the entity, as well as the ability to use this power to affect the variable returns of the entity. The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive income from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by other members of the Group. All intra-group transactions, balances, income and expenses are eliminated in full on consolidation. A change in the ownership interest of a subsidiary that does not result in a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it: • derecognises the assets (including goodwill) and liabilities of the subsidiary; • derecognises the carrying amount of any non-controlling interest; • recognises the fair value of the consideration received; • recognises the fair value of any investment retained; • recognises any surplus or deficit in profit or loss, and; • reclassifies to profit or loss or transfers directly to retained earnings, as appropriate, the parent’s share of components previously recognised in other comprehensive income. Certain prior year disclosures have been reclassified for consistency with the current year presentation. These reclassifications are not material to the current period financial report. 1.3 Changes to Accounting Policies Except as described below, the accounting policies applied by the Group in its financial statements are the same as those applied by the Group in its consolidated financial report for the year ended 30 June 2023. New and amendments accounting standards and interpretations adopted: AASB 2023-2 Amendments to Australian Accounting Standards – International Tax Reform – Pillar Two Model Rules. IMDEX LIMITED and its controlled entities ABOUT THIS REPORT 84 1.3 Changes to Accounting Policies (continued) The Group applied the mandatory exception to the recognition and disclosure of deferred taxes arising from OECD Pillar Two income taxes for the first time for the annual reporting period ending 30 June 2023. As at 30 June 2024, the Group is not considered to be within scope of the Pillar Two as the consolidated revenue is lower than the threshold. AASB 2021-5 Amendments to Australian Accounting Standards – Deferred Tax related to Assets and Liabilities arising from a Single Transaction. New and amended standards issued but not yet effective: Except as described below, there are no new standards or interpretations that are not yet effective that would be expected to have a material impact on the Group in the current or future reporting periods and on foreseeable future transactions: AASB 18 Presentation and Disclosure in Financial Statements. 1.4 Critical Accounting Judgements and Key Sources of Estimation Uncertainty In the application of the Group’s accounting policies, management is required to make judgements, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other relevant factors. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Significant judgements, estimates and assumptions made by management in the preparation of these financial statements are outlined in the following notes: 2.3 – Revenue recognition – estimating variable consideration for volume rebates 4.1 – Recoverability of receivables 4.3 – Recoverability of non-current assets 4.4 – Leases 4.5 – Intangible assets 4.8 – Investments in associates 5.1 – Taxation 5.2 – Acquisition of subsidiaries/assets 5.4 – Share-based payments IMDEX LIMITED and its controlled entities OPERATING PERFORMANCE 85 2.1 Earnings per share 2024 2023 $’000 $’000 Profit attributable to equity holders of the Company in the calculation of basic and diluted earnings per share 32,399 34,995 Number of Shares Weighted average number of shares used in the calculation: Number of shares for basic earnings per share 509,799,776 440,417,327 Effect of dilutive share rights 27,622,961 41,816,754 Number of shares for diluted earnings per share 537,422,737 482,234,081 From continuing operations Basic earnings per share Including individually significant items 6.36 7.95 Excluding individually significant items (Note 2.5) 9.24 12.01 Diluted earnings per share 6.03 7.55 2.2 Segment information An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the Group), whose operating results are regularly reviewed by the Group’s Chief Operating Decision Maker (CODM) to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available. Management will also consider other factors in determining operating segments such as the existence of a regional general manager and the level of segment information presented to the Board of Directors. Information reported to the CODM for the purposes of resource allocation and assessment of segment performance focuses on the regions serviced. The Directors of the Company have chosen to organise the Group around different geographical markets serviced by the entity’s products and services. No operating segments have been aggregated in arriving at the reportable segments of the Group. All segments are in the business of the manufacture and sale/rental of products and software to the mining sector along the following geographical lines: AM – Americas APAC – Asia Pacific AE – Africa / Europe The operating segment results include the results of the Devico Group following completion of the acquisition on 28 February 2023. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items mainly comprise deferred tax assets, treasury cash, net financing costs for the Group and the corporate portion of head office costs. Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected to be used for more than one period. The following is an analysis of the revenue and results for the year, analysed by reportable segment. The primary means by which the Board views the business and makes key decisions is based on geographical lines. IMDEX LIMITED and its controlled entities OPERATING PERFORMANCE 86 2.2 Segment information (continued) Segment results AM – Americas APAC – AsiaPac AE – Africa / Europe Segment Total IMDEX Product(i) Central administr ation costs(ii) Un- allocated(iii) Total 2024 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 Revenue from sale of goods, rentals and software 215,831 116,378 113,075 445,284 - - - 445,284 Results before individually significant items (Note 2.5) Earnings before individually significant items, interest, income tax, depreciation and amortisation 84,494 45,816 55,416 185,726 (41,678) (10,109) (3,218) 130,721 Depreciation and amortisation expenses (27,029) (13,579) (11,481) (52,089) (476) (483) - (53,048) Finance income - - - - - - 2,591 2,591 Finance costs (793) (913) (492) (2,198) - (214) (9,878) (12,290) Profit before tax before individually significant items (Note 2.5) 56,672 31,324 43,443 131,439 (42,154) (10,806) (10,505) 67,974 Income tax expense - - (20,875) (20,875) Profit after tax before individually significant items (Note 2.5) 56,672 31,324 43,443 131,439 (42,154) (10,806) (31,380) 47,099 Individually significant items (Note 2.5) Gross individually significant items - - - - - - (17,841) (17,841) Tax on individually significant items - - - - - - 3,141 3,141 Net individually significant items - - - - - - (14,700) (14,700) Profit after tax 32,399 2023 Revenue from sale of goods, rentals and software 190,431 119,129 101,838 411,398 - - - 411,398 Results before individually significant items (Note 2.5) Earnings before individually significant items, interest, income tax, depreciation and amortisation 76,546 44,956 51,993 173,495 (39,677) (9,568) (1,672) 122,578 Depreciation and amortisation expenses (21,632) (10,339) (8,167) (40,138) (869) (181) - (41,188) Finance income - - - - - - 996 996 Finance costs (484) (846) (275) (1,605) - (76) (4,044) (5,725) Profit before tax before individually significant items (Note 2.5) 54,430 33,771 43,551 131,752 (40,546) (9,825) (4,720) 76,661 Income tax expense - - - - - - (23,756) (23,756) Profit after tax before individually significant items (Note 2.5) 54,430 33,771 43,551 131,752 (40,546) (9,825) (28,476) 52,905 Individually significant items (Note 2.5) Gross individually significant items - - - - - - (22,064) (22,064) Tax on individually significant items - - - - - - 4,154 4,154 Net individually significant items - - - - - - (17,910) (17,910) Profit after tax 34,995 (i) IMDEX Product includes Research and Development, Software Development, Product Management and Intellectual Property activities. Included in IMDEX Product is R&D spend which has been adjusted during the period to include product management activities. Comparative has been restated. R&D spend (excluding capitalised development costs) for the period totals $34.4 million (FY23: $32.4 million). (ii) Central administration costs comprise the corporate portion of head office costs. Head office costs attributable to operations are allocated to reportable segments in proportion to the revenues earned from those segments. (iii) Unallocated items include the share of loss of an associate, Individually Significant Items (ISI), finance income and finance costs associated with the Group treasury function. Interest on lease liabilities is considered directly attributable to the segments and has been included in their segment results. IMDEX LIMITED and its controlled entities OPERATING PERFORMANCE 87 2.2 Segment information (continued) Segment assets and liabilities Assets Liabilities 2024 2023(i) 2024 2023(i) $’000 $’000 $’000 $’000 AM – Americas 352,388 366,135 31,985 29,141 APAC – AsiaPac 166,889 164,479 45,767 46,717 AE – Africa / Europe 157,125 155,869 20,308 17,027 Total of all segments 676,402 686,483 98,060 92,885 Unallocated 109,742 124,607 116,807 161,997 Consolidated 786,144 811,090 214,867 254,882 For the purposes of monitoring segment performance and allocating resources between segments: • All assets are allocated to reportable segments other than tax assets, investment in associate, assets classified as held for sale and treasury cash. • All liabilities are allocated to reportable segments other than tax liabilities and external loan. Other segment information AM – Americas APAC – AsiaPac AE – Africa / Europe Unallocated Total 2024 $’000 $’000 $’000 $’000 $’000 Acquisition of segment net assets - - - - - 2023 Acquisition of segment net assets(i) 225,303 60,432 74,939 (25,276) 335,398 (i) The prior period amounts have been restated as a result of finalising the purchase price allocation for the Devico acquisition (refer to Note 5.2). IMDEX LIMITED and its controlled entities OPERATING PERFORMANCE 88 2.3 Revenue and expenses 2024 2023 Note $’000 $’000 Revenue Sale of goods(i) 158,998 166,229 Rentals, services and software(ii) 286,286 245,169 445,284 411,398 (i) The Group typically satisfies the obligation associated with the sale of drilling fluids and equipment at a point in time upon shipment or delivery when control is transferred to customers. (ii) The Group typically satisfies the obligation to provide rental products and services and software subscriptions over time. Revenue from contracts with customers is recognised at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services. Revenue is recognised net of allowances for returns and customer claims and any taxes collected from customers, which are subsequently remitted to government authorities. Contract assets and contract liabilities are not material to the Group’s financial position. Key Estimates and Judgements Determining whether products and services and software subscriptions are considered distinct performance obligations that should be accounted for separately versus together requires significant judgement. The Group provides products and services to its customers based on contracts that may contain several elements but for the majority of contracts, these elements represent only one single performance obligation for which revenue is recognised. Software revenue is presented together with rental revenue, given the high level of integration between our sensors and software technologies (in particular IMDEX HUB-IQ). The Group may be entitled to variable consideration in several forms which are determined through its agreements with customers. The Group can offer prompt payment discounts, sales rebates or other incentive payments to customers. Sales rebates and other incentive payments are typically awarded upon achievement of certain performance metrics, including volume. The Group utilises forecasted sales data and rebate percentages specific to each customer agreement and updates its judgement of the amount to which the customer is entitled each period, to determine the variable consideration to be received. Expense analysis by nature: 2024 2023 Note $’000 $’000 Employee benefits expense Salaries and wages(i) (109,072) (90,914) Defined contribution superannuation/pension costs (7,527) (6,140) Share based payments(i) (10,190) (8,170) (126,789) (105,224) Depreciation and amortisation expense Depreciation of property, plant and equipment 4.3 (28,123) (26,453) Depreciation of right-of-use assets 4.4 (9,006) (7,157) Amortisation of intangible assets 4.5 (15,919) (7,578) (53,048) (41,188) Finance costs Interest on lease liabilities 4.4 (2,411) (1,681) Amortisation of borrowing costs (2,047) (359) Interest and other financing costs (7,832) (3,685) (12,290) (5,725) IMDEX LIMITED and its controlled entities OPERATING PERFORMANCE 89 2.3 Revenue and expenses (continued) 2024 2023 Note $’000 $’000 Other expenses Consulting, audit and legal expenses (ii) (iii) (17,127) (34,854) Facilities and utilities expenses (5,888) (4,471) Travel and accommodation(ii) (12,396) (10,747) Slow-moving and obsolete stock (1,989) (189) Allowance for expected credit losses 4.1 (3,615) (1,658) Software and network infrastructure(ii) (7,566) (5,971) Materials associated with developing technologies (3,189) (3,747) Other expenses(ii) (17,482) (13,886) (69,252) (75,523) (i) The current period expenses include costs associated with the Devico acquisition and integration activity, impacting expenses presented above: salaries and wages of $3.3 million (FY23: $0.5 million) and share based payments of $5.2 million (FY23: $1.0 million). Refer to Note 2.5 Individually Significant Items for further disclosures. (ii) The current period expenses include costs associated with the Devico acquisition and integration activity, impacting expenses presented above: consulting expenses of $1.1 million (FY23: $7.0 million); travel and accommodation of $0.7 million (FY23: $0.7 million); software and network infrastructure of $0.1 million (FY23: $0.3 million), exceptional litigation cost nil (FY23: $11.1 million) and other expenses of $0.1 million (FY23: $1.1 million). Refer to Note 2.5 Individually Significant Items for further disclosures. (iii) Includes legal, audit, taxation, share registry, corporate secretarial fees and consulting services. Defined contribution plans Contributions to defined contribution superannuation/pension plans are expensed when incurred. 2.4 Dividends The following dividends have been paid by the Company or declared by the Directors since the commencement of the financial year ended 30 June 2024: (i) FY23 fully-franked final dividend of 2.1 cents (2022: 1.9 cents) per share paid on 12 October 2023; (ii) FY24 fully-franked interim dividend of 1.5 cents (2023: 1.5 cents) per share paid on 28 March 2024; and (iii) FY24 fully-franked final dividend of 1.3 cents (2023: 2.1 cents) per share to be paid on 10 October 2024. The franking account balance is $25.2 million (2023: $35.8 million). IMDEX LIMITED and its controlled entities OPERATING PERFORMANCE 90 2.5 Individually significant items (ISIs) Profit after tax includes the following expenses whose disclosure is relevant in explaining the financial performance of the Group: Gross Tax Net 2024 $’000 $’000 $’000 Devico integration and organisation design costs (10,472) 3,141 (7,331) Impairment of assets classified as held for sale (Note 2.6) (7,369) - (7,369) Total individually significant items (17,841) 3,141 (14,700) • Devico integration and organisation design costs include integration plus organisation design activities and associated KMP retention costs as well as KMP incentives. • Impairment loss is related to the assets classified as held for sale associated with the MAGHAMMER technology (refer to note 4.9). Gross Tax Net 2023 $’000 $’000 $’000 Exceptional legal costs (11,100) 3,330 (7,770) Devico transaction and integration costs (10,592) 824 (9,768) Flexidrill settlement – residual cost (Note 2.6) (372) - (372) Total individually significant items (22,064) 4,154 (17,910) • Exceptional litigation costs of $11.1 million were incurred in the prior year, relating to costs incurred in respect of international IP infringement matters. • Devico transaction and integration costs include M&A, due diligence and integration activities, as well as associated KMP retention costs. 2.6 Impairment loss net of related fair value adjustment 2024 2023 Note $’000 $’000 Impairment loss net of related fair value adjustment Flexidrill settlement – residual cost - (372) Impairment of assets classified as held for sale 4.9 (7,369) - (7,369) (372) During the current period, the Group continued to progress the divestment of MAGHAMMER however the intended sale did not occur. The Group has recognised an impairment loss on the carrying value of the major classes of assets associated with the MAGHAMMER Technology of $7.4 million (refer to Note 4.9). During the prior period, the Group finalised a Deed of Termination and Settlement with the prior owners of the Flexidrill technologies, with final settlement of $1.8 million paid in August 2022. This resulted in a net $0.4 million expense during the period. IMDEX LIMITED and its controlled entities DEBT & CAPITAL 91 3.1 Cash and cash equivalents Reconciliation of cash and cash equivalents For the purposes of the Statement of Cash Flows, cash includes cash at bank, cash on hand, deposits at call and cash held in mutual funds. Cash at bank earns interest at floating rates based on daily bank deposit rates. Cash held in mutual funds represent cash investments which generate returns higher than cash at bank and can be accessed immediately if required. Cash at the end of the year as shown in the Statement of Cash Flows is reconciled to the related items in the balance sheet as follows: 2024 2023 $’000 $’000 Cash at bank and on hand 47,132 58,128 Reconciliation from the profit for the year to net cash generated from operating activities Profit for the year 32,399 34,995 Adjustments for non-cash items Depreciation and amortisation of non-current assets 53,048 41,188 Interest paid disclosed as financing activities 7,832 3,685 Allowance for expected credit losses 3,615 1,658 Share options and performance rights expensed 10,191 8,170 Share of loss of an associate 3,221 1,672 Impairment loss net of related fair value adjustment 7,369 372 Interest on lease liabilities 2,411 1,681 Amortisation of borrowing costs 2,047 359 Other 1,348 512 Changes in assets and liabilities during the financial year (Increase) / decrease in assets: Current receivables (8,326) (9,288) Current inventories 2,958 (653) Other current assets (775) (4,233) Other non-current assets 2,023 (1,084) Increase / (decrease) in liabilities: Current payables (11,062) 5,638 Provision for employee entitlements 508 771 Current and deferred tax liability (761) (2,937) Net cash generated from operating activities 108,046 82,506 IMDEX LIMITED and its controlled entities DEBT & CAPITAL 92 3.2 Borrowings 2024 2023 $’000 $’000 Current borrowings - secured JP Morgan Australia 28,000 28,000 28,000 28,000 Non-current borrowings - secured Commonwealth Bank of Australia - 12,542 JP Morgan Australia 54,138 82,506 54,138 95,048 Total 82,138 123,048 30 June 2023 Drawn Repaid Foreign Exchange Movement Capitalised Borrowing Costs Amortisation Borrowing Costs 30 June 2024 $’000 $’000 $’000 $’000 $’000 $’000 $’000 Total borrowings Commonwealth Bank of Australia Facility 12,542 4,500 (17,250) 141 - 67 - JP Morgan Australia Facility 110,506 12,530 (40,750) 65 (2,193) 1,980 82,138 Total 123,048 17,030 (58,000) 206 (2,193) 2,047 82,138 All loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable fees, premiums paid and transaction costs. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date. The key terms of the Commonwealth Bank Facility are as follows: Term: Multicurrency, Multi Option Revolving Facility has no repayment requirements other than at expiry. The facility is due to expire on 31 January 2025. Maximum Facility: $30 million. Drawn Balance at 30 June 2024: bank guarantees $1.2 million, credit cards $0.2 million. Undrawn Balance at 30 June 2024: $28.6 million. Effective Interest Rate: 4.37%. The key terms of the JP Morgan Australia A$84 million Amortising Term Loan facility are as follows: Term: Amortising Term Loan with repayment instalments of $7 million per calendar quarter. The facility is due to expire on 19 January 2026. Contractual Interest Rate: Floating rate plus a margin Effective Interest Rate: 8.88%. The key terms of the JP Morgan Australia A$36 million Revolving Working Capital facility are as follows: Term: Multi-currency Revolving Working Capital facility. The facility is due to expire on 19 January 2027. Maximum Facility: $36 million Drawn Balance at 30 June 2024: $36 million. Undrawn Balance at 30 June 2024: nil. Contractual Interest Rate: Floating rate plus a margin Effective Interest Rate: 8.88%. The facilities are secured against the assets of key entities across the IMDEX group, located across Australia, New Zealand, Europe and the Americas, and subject to typical financial covenants. IMDEX LIMITED and its controlled entities DEBT & CAPITAL 93 3.3 Issued capital 2024 2023 Notes Number $'000 Number $'000 Issued and Paid-Up Capital - Fully paid ordinary shares Balance at beginning of the financial year 505,454,641 401,164 396,452,400 169,078 Shares issued relating to the MinePortal acquisition (ii) 1,578,117 2,399 1,578,117 3,272 Issue of shares under performance rights 1,769,719 2,766 - - Issue of shares under STI award 1,743,955 3,217 - - Shares issued in the equity raising related to the acquisition of Devico AS (iii) - - 101,943,277 215,824 Shares issued as partial consideration for the acquisition of Devico AS (iii) - - 5,480,847 12,990 Closing balance at end of the financial year (i) 510,546,432 409,546 505,454,641 401,164 (i) Fully paid ordinary shares carry one vote per share and carry the right to dividends. (ii) During the period, the Company issued 1.6 million ordinary shares in connection with the acquisition of MinePortal. Refer to Note 5.2. (iii) During the prior period, the Company issued 101.9 million ordinary shares in the equity raising in connection with the acquisition of Devico AS and issued 5.5m ordinary shares as part of the acquisition consideration. Refer to Note 5.2. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options for the acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration. Where any Group company purchases the Company’s equity instruments, for example as the result of a share buy- back or a share-based payment plan, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the owners of the Company as treasury shares until the shares are cancelled or reissued. Where such ordinary shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the owners of the Company. 3.4 Financial risk management Categories of financial instruments 2024 2023 $’000 $’000 Financial assets carried at amortised cost Cash and cash equivalents 47,132 58,128 Trade and other receivables 90,646 90,072 Non-current assets - other 2,612 4,635 140,390 152,835 Financial liabilities carried at amortised cost Trade and other payables 43,902 46,823 Lease liabilities 45,515 38,300 Borrowings 82,138 123,048 171,555 208,171 Financial risk management objectives The Group is exposed to financial risks through the normal course of its business operations. The key financial risks impacting the Group relate to its financial instruments as per those disclosed in the statement of financial position. Specifically, those key risks are considered to be foreign currency risk and interest rate risk. The Group monitors its exposure to these risks on a regular basis and may enter into derivative financial instruments to manage these risks where appropriate. There are no derivative financial instruments in operation at the reporting date. IMDEX LIMITED and its controlled entities DEBT & CAPITAL 94 3.4 Financial risk management (continued) Foreign currency risk management The functional currency of the Company is Australian dollars. Certain financial instruments of the Group are exposed to movements in various currencies. The Group undertakes certain transactions denominated in foreign currencies, hence exposures to foreign exchange rate fluctuations arise. Exchange rate exposures are managed with the use of natural hedges where possible and with the use of financial instruments where benefit outweighs cost within approved policy parameters. During the current and prior year no derivative instruments were used to manage foreign exchange risk. Exposure The carrying amount in Australian dollars of the Group’s monetary assets and liabilities denominated in currencies other than Australian dollars at the reporting date are as per the table below. Non-Australian dollar liabilities include trade creditors and borrowings recorded in Australian as well as non-Australian entities. Non-Australian dollar assets include cash on hand and debtors recorded in Australian as well as non-Australian entities. Any fluctuation in exchange rates relative to the Australian dollar will cause the below assets and liabilities to change in value. Liabilities Assets 2024 2023 2024 2023 $'000 $'000 $'000 $'000 United States Dollars 17,331 16,958 53,524 63,255 Euro 1,232 863 12,839 10,066 South African Rand 755 680 7,119 5,259 Canadian Dollars 1,311 2,089 13,934 13,234 Chilean Pesos 609 667 6,147 8,017 Norwegian Krone 793 1,172 2,751 6,894 Argentine Pesos 43 47 1,704 2,237 Other 384 620 9,204 8,785 Sensitivity The Group is mainly exposed to United States Dollars, Euro and Canadian Dollars, Chilean Pesos and Norwegian Krone. The table below shows the Group’s main exposure to foreign currency transactional risk (Australian dollar equivalent) and the effect on profit or loss and equity had exchange rates been 10% higher or lower than the year end rate with all other variables held constant. United States Dollar Impact Canadian Dollar Impact 2024 2023 2024 2023 $'000 $'000 $'000 $'000 10% increase 3,619 4,630 1,262 1,114 10% decrease (3,619) (4,630) (1,262) (1,114) Euro Impact Chilean Pesos Impact 2024 2023 2024 2023 $'000 $'000 $'000 $'000 10% increase 1,161 920 554 735 10% decrease (1,161) (920) (554) (735) Norwegian Krone Impact 2024 2023 $'000 $'000 10% increase 196 572 10% decrease (196) (572) IMDEX LIMITED and its controlled entities DEBT & CAPITAL 95 3.4 Financial risk management (continued) Sensitivity (continued) The following table details the Group’s sensitivity to a 100% (2023: 100%) increase or decrease in the Australian Dollar against Argentine Pesos which is experiencing hyperinflation. Argentine Pesos Impact 2024 2023 $'000 $'000 100% increase 1,660 2,189 100% decrease (1,660) (2,189) Profit / (loss) impacts are mainly attributable to exposure on cash, trade receivables and payables at the reporting date denominated in the applicable foreign currency. Interest rate risk management The Group’s cash flow is exposed to interest rate risk as entities in the Group borrow, lend and deposit funds at floating rates of interest. The following table details the Group’s pre-tax loss sensitivity to a 1% increase and decrease in variable interest rates: Consolidated Impact 2024 2023 $ '000 $ '000 Increased interest rate (1,277) (1,613) Decreased interest rate 1,277 1,613 Credit risk management The Group’s maximum exposure to credit risk is the carrying amount of those assets as indicated in the statement of financial position. Credit risk on financial instruments refers to the potential financial loss to the Group that may result from counterparties failing to meet their contractual obligations. The Group manages its counterparty risk by limiting its transactions to counterparties of sound credit worthiness. The Group faced no significant credit exposures at the balance date. Liquidity risk management Ultimate responsibility for liquidity risk management rests with the Board of Directors, who monitors short, medium and long term liquidity requirements through the use of financial models. The treasury function reports regularly to key management personnel and the Board on matters affecting liquidity risk. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. At 30 June 2024 the Company/Group has undrawn facilities of $28.6 million (2023: $16.2 million). Maturity of financial liabilities The following tables detail the Company’s and the Group’s remaining contractual maturity for its non–derivative financial liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group may be required to pay. The table includes both interest and principal cash flows. Average effective interest rate 0-3 months 3 months to 1 year 1-5 years 5+ years Total % $’000 $’000 $’000 $’000 $’000 2024 Trade and other payables - 43,902 - - - 43,902 Lease liabilities 5.4% 1,656 4,968 26,841 18,124 51,589 Borrowings 8.9% 7,000 21,000 54,138 - 82,138 52,558 25,968 80,979 18,124 177,629 2023 Trade and other payables - 46,823 - - - 46,823 Lease liabilities 4.6% 2,177 6,530 24,393 21,388 54,488 Borrowings 5.8% 7,000 21,000 95,048 - 123,048 56,000 27,530 119,441 21,388 224,359 IMDEX LIMITED and its controlled entities DEBT & CAPITAL 96 3.4 Financial risk management (continued) Maturity of financial assets The following tables detail the Company’s and the Group’s remaining contractual maturity for its financial assets. The tables have been drawn up based on the undiscounted cash flows of financial assets including interest that will be earned on those assets except where the Company/Group anticipates that the cash flow will occur in a different period. Average effective interest rate 0-3 months 3 months to 1 year 1-5 years 5+ years Total % $’000 $’000 $’000 $’000 $’000 2024 Trade and other receivables 90,646 - - - 90,646 Non-current assets - other - - 2,612 - 2,612 Cash and cash equivalents 4.7% 47,132 - - - 47,132 137,778 - 2,612 - 140,390 2023 Trade and other receivables 90,072 - - - 90,072 Non-current assets - other - - 4,635 - 4,635 Cash and cash equivalents 1.6% 58,128 - - - 58,128 148,200 - 4,635 - 152,835 Non- derivative financial instruments Recognition and measurement Financial instruments are initially measured at cost on trade date, which includes transaction costs, when the related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out below. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. All regular purchases or sales of financial assets are recognised and derecognised on a trade date basis, where the purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned. Fair value of financial Instruments The Directors consider that the carrying amount of financial assets and liabilities recorded in the financial statements represents or approximate their respective fair values. 3.5 Commitments for expenditure Capital expenditure commitments At 30 June 2024 the Group had $0.5 million capital commitments (2023: $4.2 million). IMDEX LIMITED and its controlled entities OTHER ASSETS & LIABILITIES 97 4.1 Trade and other receivables 2024 2023 Notes $’000 $’000 Current Trade receivables (i) 96,487 92,374 Less allowance for expected credit losses (iii) (9,498) (6,670) 86,989 85,704 Other receivables and accrued income 3,657 4,368 (ii) 90,646 90,072 (i) The average credit period on sales of goods is approximately 60 days. Trade receivables are interest free unless outside of terms at which point interest may be charged. (ii) The net carrying amount of trade and other receivables approximates their fair values. (iii) Movement in the loss allowance Balance at the beginning of the year 6,670 3,951 Acquisition of subsidiaries - 1,422 Written off during the year (787) (361) Allowance for expected credit losses 2.3 3,615 1,658 Balance at the end of the year 9,498 6,670 The Expected Credit Loss (ECL) calculation for trade receivables considers both quantitative information from historic losses as well as qualitative information on different debtor profiles. The provision rates are based on days past due for groupings of various customer segments that have similar loss patterns. The assessment of the correlation between historical loss rates, forecast economic conditions and ECLs is a significant estimate. The Group’s historical credit loss experience and forecast of economic conditions may also not be representative of customer’s actual default in the future. The concentration of credit risk is limited due to the customer base being large and unrelated. Accordingly, the Directors believe that there is no further credit provision required in excess of the loss allowance above. The Group does not hold any collateral over these balances. 4.2 Inventories 2024 2023 $’000 $’000 Current Raw materials 3,659 4,170 Work in progress 1,650 1,072 Finished goods(i) 57,698 62,215 63,007 67,457 (i) The prior period amounts have been restated as a result of finalising the purchase price allocation for the Devico acquisition (refer to Note 5.2). Inventories are valued at the lower of cost or net realisable value. Costs, including an appropriate portion of fixed and variable overhead expenses, are assigned to inventory on hand by the method most appropriate to each particular class of inventory, with the majority being valued on a first in first out basis. Net realisable value represents the estimated selling price less all estimated costs of completion and costs necessary to make the sale. Inventory includes an allowance for slow moving and obsolete stock of $5.8 million (2023: $3.9 million). IMDEX LIMITED and its controlled entities OTHER ASSETS & LIABILITIES 98 4.3 Property, plant and equipment Plant and Equipment at cost Leasehold Improvements at cost Capital Works in Progress at cost TOTAL Notes $’000 $’000 $’000 $’000 2024 Cost 171,040 13,504 2,033 186,577 Accumulated depreciation and impairment loss (121,606) (8,403) - (130,009) Total carrying value 49,434 5,101 2,033 56,568 Movement Carrying amount at the beginning of the year(ii) 53,632 2,099 2,145 57,876 Additions/transfers within property, plant and equipment(i) 24,671 4,636 16 29,323 Depreciation expense 2.3 (26,483) (1,640) - (28,123) Foreign currency exchange differences (2,386) 6 (128) (2,508) Carrying amount at the end of the year 49,434 5,101 2,033 56,568 2023 Cost 148,755 8,862 2,145 159,762 Accumulated depreciation and impairment loss (95,123) (6,763) - (101,886) Total carrying value 53,632 2,099 2,145 57,876 Movement Carrying amount at the beginning of the year 49,877 2,531 3,130 55,538 Additions/transfers within property, plant and equipment(i) 21,294 588 (940) 20,942 Acquisition of subsidiaries(ii) 5.2 8,108 - - 8,108 Depreciation expense 2.3 (25,454) (999) - (26,453) Foreign currency exchange differences (193) (21) (45) (259) Carrying amount at the end of the year(ii) 53,632 2,099 2,145 57,876 (i) Includes external purchase and direct cost associated with internally manufactured plant and equipment. (ii) The prior period amounts have been restated as a result of finalising the purchase price allocation for the Devico acquisition (refer to Note 5.2). Property, plant and equipment Plant and equipment and leasehold improvements are stated at cost less accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the item. In the event that settlement of all or part of the purchase consideration is deferred, cost is determined by discounting the amounts payable in the future to their present value as at the date of acquisition. The gain or loss arising on disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss. Capital works in progress Capital works in progress in the course of construction for production or supply purposes, or for purposes not yet determined, are carried at cost, less any recognised impairment loss. Cost includes professional fees and, for qualifying assets, borrowing costs capitalised in accordance with the Group’s accounting policy. Depreciation Depreciation is calculated on a straight-line basis in order to write off the net cost of each asset over its expected useful life to its estimated residual value. Leasehold improvements are depreciated over the estimated useful life, using the straight-line method. The estimated useful lives and depreciation method are reviewed at the end of each annual reporting period, with the effect of any changes recognised on a prospective basis. The annual depreciation rate for plant and equipment is 20% to 33% and the annual depreciation rate for leasehold improvement is 10% to 33%. Depreciation of capital works in progress, on the same basis as other property, plant and equipment assets, commences when the assets are ready for their intended use. IMDEX LIMITED and its controlled entities OTHER ASSETS & LIABILITIES 99 4.4 Leases Right of use assets Notes Land and Buildings Motor Vehicles Other TOTAL $’000 $’000 $’000 $’000 2024 Cost 48,786 7,512 1,629 57,927 Accumulated depreciation (15,794) (3,914) (619) (20,327) Total carrying value 32,992 3,598 1,010 37,600 Movement Carrying amount at the beginning of the year 26,199 3,395 2,526 32,120 Additions 10,203 2,196 1,641 14,040 Disposals (649) (143) (1,805) (2,597) Lease remeasurements 3,172 48 - 3,220 Depreciation 2.3 (5,768) (1,913) (1,325) (9,006) Foreign currency exchange differences (165) 15 (27) (177) Carrying amount at the end of the year 32,992 3,598 1,010 37,600 2023 Cost 38,525 6,370 5,238 50,133 Accumulated depreciation (12,326) (2,975) (2,712) (18,013) Total carrying value 26,199 3,395 2,526 32,120 Movement Carrying amount at the beginning of the year 24,425 2,998 766 28,189 Additions 696 1,741 3,232 5,669 Acquisition of subsidiaries 7,422 15 - 7,437 Disposals (896) (26) (1) (923) Lease remeasurements (816) 61 88 (667) Other (81) - (318) (399) Depreciation 2.3 (4,424) (1,493) (1,240) (7,157) Foreign currency exchange differences (127) 99 (1) (29) Carrying amount at the end of the year 26,199 3,395 2,526 32,120 Lease liabilities 2024 2023 Notes $’000 $’000 Opening 38,300 34,651 Additions 14,019 5,670 Acquisition of subsidiaries 5.2 - 7,437 Disposal of lease liability (2,263) (1,073) Lease remeasurements 3,220 (667) Repayments (10,014) (9,275) Accretion of interest 2.3 2,411 1,681 Net foreign exchange differences (158) (124) Carrying amount at 30 June 45,515 38,300 Current 5,795 5,789 Non-current 39,720 32,511 Carrying amount at 30 June 45,515 38,300 IMDEX LIMITED and its controlled entities OTHER ASSETS & LIABILITIES 100 4.4 Leases (continued) The table below presents the contractual undiscounted cash flows associated with the Group’s lease liabilities, representing principal and interest. The figures will not necessarily reconcile with the amounts disclosed in the consolidated statement of financial position. 2024 2023 $’000 $’000 Due for payment in: 1 year or less 6,624 8,706 1-2 years 9,826 8,112 2-3 years 9,254 6,253 3-4 years 4,551 5,332 4-5 years 3,210 4,697 More than 5 years 18,124 21,388 51,589 54,488 The Group recognises a Right-of-Use asset at the commencement date of the lease, initially measured at the present value of the future lease payments, with the right-of- use asset adjusted by the amount of any lease payments pre- commencement date plus any make good obligations. The Right-of-Use asset is depreciated over the shorter of the asset’s useful life and the term of the lease, on a straight-line basis. The useful life is within the range from 1-20 years. Lease Liabilities At the commencement date of a lease, the Group recognises and measures the lease liability at the present value of lease payments that are unpaid at that date. The lease payments include: • Fixed payments, offset by any lease incentives receivable; • Variable lease payments linked to an index or rate; • Exercise price of a purchase option (where the Group is reasonably certain to exercise that option); and • Payment of penalties for terminating the lease (where the life of the lease has assumed termination). Lease liabilities are remeasured when there is a change in future lease payments resulting from a change in an index or rate, or a change in the assessed lease term. A corresponding adjustment is made to the carrying amount of the right of use asset, or is recorded in profit or loss if the carrying amount has been reduced to zero. For short-term leases (lease term of 12 months or less) and leases of low-value assets (which includes tablets and personal computers, small items of office furniture and telephones), the Group has opted to recognise a lease expense on a straight-line basis as permitted by AASB 16. This expense is presented within ‘other expenses’ in profit or loss (2024: $1.9 million, 2023: $1.7 million). Key Estimates and Judgements (a) Control Judgement is required to assess whether a contract is or contains a lease at inception by assessing whether the Group has the right to direct the use of the identified asset and obtain substantially all the economic benefits of the use of that asset. (b) Lease term Judgement is required when assessing the term of the lease and whether to include optional extension and termination periods. Option periods are only included in determining the lease term at inception when they are reasonably certain to be exercised. Lease terms are reassessed when a significant change in circumstances occurs. The Group included the renewal period as part of the lease term for the lease of the corporate head office and the lease of the Western Australian manufacturing and distribution facility, as both properties were purpose built for the Group and the extensions of these leases is reasonably certain. Renewal options for motor vehicles are not included as part of the lease term because the Group typically leases vehicles for not more than five years and is not likely to exercise any renewal options. (c) Discount rates Judgement is required to determine the discount rate, where the discount rate is the Group’s incremental borrowing rate if the rate implicit in the lease cannot be readily determined. The incremental borrowing rate is determined with reference to the Group’s borrowing portfolio at the inception of the arrangement or the time of the modification. Refer to Note 3.2 Borrowings for the effective interest rate during the year. IMDEX LIMITED and its controlled entities OTHER ASSETS & LIABILITIES 101 4.5 Intangible assets Goodwill Intellectual property and other intangibles Software (ii) TOTAL Notes $’000 $’000 $’000 $’000 At cost 325,332 137,826 18,472 481,630 Accumulated amortisation (23,160) (7,596) (30,756) Accumulated impairment losses (24,295) (12,113) - (36,408) Net carrying amount as at 30 June 2024 301,037 102,553 10,876 414,466 Movement As at 30 June 2023 301,646 114,038 11,159 426,843 Additions - 657 3,529 4,186 Amortisation expense 2.3 - (12,129) (3,790) (15,919) Foreign currency exchange differences (609) (13) (22) (644) As at 30 June 2024 301,037 102,553 10,876 414,466 At cost 325,941 136,659 14,968 477,568 Accumulated amortisation - (10,508) (3,809) (14,317) Accumulated impairment losses (24,295) (12,113) - (36,408) Net carrying amount as at 30 June 2023 301,646 114,038 11,159 426,843 Movement As at 30 June 2023 62,200 28,546 7,047 97,793 Additions - 201 6,012 6,213 Acquisition of assets/subsidiary (i) 5.2 238,938 97,200 - 336,138 Amortisation expense 2.3 - (5,592) (1,986) (7,578) Reclassified as held for sale(iii) 4.9 - (6,970) - (6,970) Foreign currency exchange differences 508 653 86 1,247 As at 30 June 2023 301,646 114,038 11,159 426,843 (i) The prior period amounts have been restated as a result of finalising the purchase price allocation for the Devico acquisition (refer to Note 5.2). (ii) Software includes $3.4 million of software under development and therefore, not yet in use at 30 June 2024 (30 June 2023: $2.6 million). (iii) Intangible assets of $6.97 million in relation to the MAGHAMMER technology were reclassified to an Asset Held for Sale at 30 June 2023. During the current year, these assets ceased to be classified as held for sale and were fully impaired. Refer Note 4.9 for further details. The assessment of goodwill and its impairment is undertaken at the Operating Segment level (as shown below), except for the Devico Group which for the purposes of the 30 June 2023 financial statements, has been assessed for impairment separately due to the proximity of the acquisition to reporting date. We have allocated the Devico Group goodwill to the Operating Segments for the purpose of the 30 June 2024 financial statements impairment testing on the basis that the accounting is finalised. 2024 2023 $’000 $’000 Africa / Europe 57,474 8,182 Asia Pacific 70,917 33,658 Americas 172,646 20,868 Devico - 238,938 301,037 301,646 IMDEX LIMITED and its controlled entities OTHER ASSETS & LIABILITIES 102 4.5 Intangible assets (continued) Intellectual property and other intangibles Intellectual property and other intangibles with a finite useful life were acquired in the Devico acquisition (completed February 2023, refer note 5.2) as well as MinePortal, Flexidrill and AusSpec acquisitions completed in previous periods. These intangible assets are amortised on a straight-line basis over the estimated useful life (up to 15 years). Amortising intangible assets are tested for impairment whenever there is an indication that the asset may be impaired. Software The Group capitalises development expenditure for internally generated software. Development expenditure is capitalised only if it can be measured reliably, the project or process is technically and commercially feasible, future economic benefits are probable and the Group intends to and has sufficient resources to complete development and to use or sell the asset. Otherwise, it is recognised in profit or loss as incurred. Subsequent to initial recognition, development expenditure is measured at cost less accumulated amortisation and any accumulated impairment losses. Software assets with a finite life are amortised on a straight- line basis over their expected useful life to the Group, being up to 5 years. Expenditure on capitalised software is capitalised only when it increases the future economics of the specific asset to which it relates and which the Group controls. All other expenditure is expensed as incurred. SaaS arrangements are service contracts providing the Group with the right to access the cloud provider’s application software over the contract period. Costs incurred to configure or customise, and the ongoing fees to obtain access to the cloud provider's application software, are recognised as operating expenses when the services are received. Significant accounting estimates and assumptions Management reviews the appropriateness of useful lives of assets at least annually, any changes to useful lives may affect prospective amortisation rates and asset carry values. Goodwill Goodwill arising in a business combination is recognised as an asset at the date that control is acquired. Where the fair value of the consideration paid for a business acquisition exceeds the fair value of the identifiable assets acquired and liabilities assumed, the difference is treated as goodwill. Goodwill is not amortised but is tested for impairment at least annually. Impairment testing of assets IMDEX assesses impairment at the Operating Segment level for Goodwill. Goodwill exists in relation to three Segments: Asia Pacific, Africa / Europe and Americas. IMDEX assesses impairment at the Cash Generating Unit (CGU) level for fixed assets and other intangible assets. A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. CGUs identified are at a lower level than each Operating Segment (based on regional hubs). The Group has five CGUs: Asia Pacific, Europe, Africa, North America and South America. The Group reviews the carrying amounts of its CGU’s at each reporting period, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, a formal estimate of the asset’s recoverable amount is calculated. Recoverable amount is the higher of Fair Value Less Costs to Sell and Value in Use. In assessing Value in Use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the carrying amount of the CGU exceeds its recoverable amount, the asset or CGU is written down and an impairment loss is recognised in the income statement. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. Significant accounting estimates and assumptions The determination of impairment involves the use of judgements and estimates that include, but are not limited to, the cause, timing and measurement of the impairment. Goodwill is tested at least annually and where there is an indicator of impairment through testing of the Operating Segments (groups of CGU’s) to which the goodwill has been allocated. Fixed assets and other intangible assets are grouped into CGUs that have been identified as being the smallest identifiable group of assets that generate cash flows, which are independent of cash flows of other assets or groups of assets. The determination of these CGUs is based on management’s judgement in regard to shared infrastructure, geographical proximity, and similar exposures to market risk and materiality. IMDEX LIMITED and its controlled entities OTHER ASSETS & LIABILITIES 103 4.5 Intangible assets (continued) Significant accounting estimates and assumptions (continued) Determining whether goodwill, intangibles and fixed assets are impaired requires an estimation of the “Value in Use” of the Operating Segment or CGU to which these assets are attributable. The Value in Use calculation requires the entity to estimate the future cash flows expected to arise from the Operating Segment or CGU and a suitable discount rate to calculate present value. A forward-looking estimation of this nature is inherently uncertain. Management is required to make significant judgements concerning the identification of impairment indicators, such as changes in competitive positions, expectations of growth, increased cost of capital, and other factors that may indicate impairment. In addition, management is also required to make significant estimates regarding future cash flows and the determination of fair values when assessing the recoverable amount of assets (or group of assets). Inputs into these valuations require assumptions and estimates to be made about forecast earnings before interest and tax and related future cash flows, growth rates, applicable discount rates, useful live and residual values. IMDEX’s forecasted results reflect the activity levels within the minerals industry. The judgements, estimates and assumptions used in assessing impairment are management’s best estimates based on current and forecast market conditions. Changes in economic and operating conditions impacting these assumptions could result in changes in the recognition of impairment charges in future periods. Management has considered a range of external, internal and other indicators that may indicate some level of impairment at the individual asset level. These include evidence of obsolescence or physical damage of an asset, and evidence available from internal reporting that indicates that the economic performance of an asset is, or will be, worse than expected. Value in Use assessments and sensitivities: Inputs to impairment calculations For Value in Use calculations, cash flow projections are based on IMDEX’s corporate plans and business forecasts prepared by management and approved by the Board for the 2024 financial year. The key assumptions impacting the discounted cashflow models used to determine the Value in Use for each CGU were as follows: • Revenue growth has been based on a range of growth rates. Initial rates are based on the FY24 Budget approved by the Board of Directors; • Subsequent growth rates are within the range included in the Corporate Valuation Model up to the terminal (5 years) period; • Cash flows beyond the five-year period are extrapolated using an estimated growth rate of 2.5% (FY23: 2.5%), which is based on Group estimates, taking into consideration historical performance as well as expected long-term operating conditions to arrive at a terminal value. Growth rates do not exceed the consensus forecasts of the long-term average growth rate for the industry in which the CGU operates. • Capital investment for the 2024 financial year is based on the forecasted numbers approved by the Board of Directors. Going forward to terminal date, capital investment gradually increases each year so that it equals the replacement cost of assets, excluding growth capital investment by terminal date; • Tax rates used were the Group’s effective tax rate; and • Post-tax discount rates used were country risk adjusted and based on data supplied by external sources and ranged from 12.3% to 19.6% (FY23: 11.6% to 21.2%). Other assumptions are determined with reference to internal and external sources of information. Increases in discount rates or changes in other key assumptions, such as operating conditions or financial performance, may cause the recoverable amounts to fall below carrying values. Management have considered various reasonably possible sensitivities in the Value in Use assessment, with changes to the following key assumptions: • Increase/decrease of 1% to the post-tax discount rate. • Increase/decrease of 1% to the terminal growth rate. • Increase/decrease of 5% in operating margins. The above sensitivities have been performed in isolation, with all other assumptions in the Value in Use assessment held constant. No reasonably possible change made to these key assumptions has given rise to an impairment. However, forward looking estimation of this nature is inherently uncertain and the outcomes of these sensitivities may vary in the future. Impairment losses recognised by cash generating unit: There have been no impairment losses for any CGU in the current or prior year. IMDEX LIMITED and its controlled entities OTHER ASSETS & LIABILITIES 104 4.6 Trade & other payables 2024 2023 Notes $’000 $’000 Trade payables (i)(iii) 13,312 20,811 Accruals and other payables (ii) 30,590 26,012 43,902 46,823 (i) Trade payables are interest free for periods ranging from 30 to 180 days. Thereafter interest may be charged at commercial rates. The carrying amount of trade payables approximates their fair values due to their short-term nature. The consolidated entity has financial risk management policies in place to endeavour to pay all payables within the credit timeframe. (ii) Accruals and other payables include a $3.6 million accrual for the FY24 STI bonuses (30 June 2023: $5.3 million). (iii) The prior period amounts have been restated as a result of finalising the purchase price allocation for the Devico acquisition (refer to Note 5.2). 4.7 Provisions 2024 2023 $’000 $’000 Current provisions Employee entitlements 8,247 7,773 Others 28 200 8,275 7,973 Non-current provisions Employee entitlements 368 293 Provisions are recognised when the Group has a present obligation (legal or constructive), as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that recovery will be received and the amount of the receivable can be measured reliably. Employee entitlements Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave, long service leave, sick leave and related on costs when it is probable that settlement will be required and they are capable of being measured reliably. Provisions made in respect of employee benefits expected to be settled within the short term, are measured at their nominal values using the remuneration rate expected to apply at the time of settlement. Provisions made in respect of employee benefits which are not expected to be settled within the short term are measured as the present value of the estimated future cash outflows to be made by the Group in respect of services provided by employees up to reporting date. Expected future payments are discounted using market yields at the reporting date on high quality corporate bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows. Termination benefit A liability for a termination benefit is recognised at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognises any related restructuring costs. IMDEX LIMITED and its controlled entities OTHER ASSETS & LIABILITIES 105 4.8 Investment in associates 2024 2023 $’000 $’000 Group’s carrying amount of the investment Krux Analytics Inc 4,931 6,614 Datarock Holdings Pty Ltd 6,340 7,257 11,271 13,871 Group’s total share of loss for the period Krux Analytics Inc (1,820) (399) Datarock Holdings Pty Ltd (1,401) (1,273) (3,221) (1,672) Krux Analytics Inc The Group acquired a 40% interest in Krux Analytics Inc (“Krux”) on 24 April 2023 for $6.9 million cash including transaction costs. Krux, a Canadian-based software company, has developed market leading drilling analytics software, focusing on the collection and analysis of exploration and production drilling data in real time. The parties have negotiated an arrangement that is likely to result in IMDEX acquiring the remaining 60% of equity in Krux, or alternatively, acquiring Krux’s material assets. As part of the Shareholders’ Agreement, Krux shareholders have been granted a Put Option to require IMDEX to acquire the remaining shares at an agreed market value on 30 April 2026, which is based on a revenue multiple applied to the prior 12 months revenue, with the amount payable subject to the overall cap. The final purchase will be funded by cash reserves or the combination of cash reserves and issue of IMDEX’s shares. In the event the Put Option is not exercised, the parties have agreed a mechanism whereby IMDEX can acquire all of Krux’s assets and liabilities at 60% of the Put Option price at its discretion. This mechanism creates a forward contract. The term of this mechanism means that the Put Option is likely to be exercised. As such, no value has been assigned to the asset purchase arrangement. The value of the Put Option is determined by the potential variances between the amount payable under the contract and the market value of Krux at that time. IMDEX has assessed that the agreed revenue multiple is a market multiple and accordingly it has attributed no value to the Put Option. The Group’s interest in Krux is accounted for using the equity method in the consolidated financial statements. The Group’s share of profit or loss of an associate is shown on the face of the statement of profit or loss. The Group accounts for additional interests in its investments in associates by recognising the difference between the consideration paid for the additional interest and the fair value of the additional share of net assets as notional intangible assets. Krux’s financial year end is March. The following table illustrates the summarised financial information of the Group’s investment in Krux: 2024 2023 $’000 $’000 Net assets/(liabilities) (2,172) 855 Group’s share in net assets/(liabilities) – 40% (869) 342 Notional intangible assets 5,800 6,272 Group’s carrying amount of the investment 4,931 6,614 Income Statement Revenue 3,729 529 Net loss for the period (3,383) (731) Group’s share of loss for the period (1,353) (293) Amortisation of the notional intangible assets (467) (106) Group’s total share of loss for the period (1,820) (399) After application of the equity method, the Group determines whether it is necessary to recognise an impairment loss on its investment in its associate. At each reporting date, the Group determines whether there is objective evidence that the investment in the associate is impaired. There has been no impairment loss in the current year. IMDEX LIMITED and its controlled entities OTHER ASSETS & LIABILITIES 106 4.8 Investment in associates (continued) The associate had no material contingent liabilities or capital commitments as at 30 June 2024. During the current period, the Group provided loan facility up to CAD$0.5 million to Krux which is to be repaid by January 2026. The loan is accounted as a financial asset measured at amortised cost and the balance of the loan receivable from Krux is CAD$0.5 million at the end of June 2024. The undrawn balance is nil at 30 June 2024. Datarock Holdings Pty Ltd The Group acquired a 30% interest in Datarock Holdings Pty Ltd (“Datarock”) on 23 November 2021 for $5.7 million cash. Datarock is an Australian-based mining technology company servicing the global exploration and mining sector. Datarock’s product suite, both existing and planned, complements IMDEX’s software offering and strengthens the Group’s cloud-based platform (IMDEX HUB-IQTM) to deliver real-time rock knowledge answer products. On 1 November 2022 and 19 May 2023, Datarock exercised first and second equity call options available under the Datarock Shareholder Agreement and Shareholder Agreement Variation Deed, which resulted in IMDEX acquiring an additional 10.9% and 8.2% in the issued capital of Datarock in exchange for additional investments in Datarock of $2.0 million and $1.5 million respectively, taking IMDEX’s total ownership interest in Datarock to 49.1%. In February 2024, the Group exercised the first Step-Up Option to increase the ownership in interest in Datarock to 51%. IMDEX holds the option to acquire the remaining interest in Datarock over the next two years, subject to Datarock achieving agreed strategic milestones. Nil value has been assigned to these step-up options as the purchase price is aligned with market value. The Group’s interest in Datarock is accounted for using the equity method in the consolidated financial statements. The Group’s share of profit or loss of an associate is shown on the face of the statement of profit or loss. The Group accounts for additional interests in its investments in associates by recognising the difference between the consideration paid for the additional interest and the fair value of the additional share of net assets as notional intangible assets. The following table illustrates the summarised financial information of the Group’s investment in Datarock: 2024 2023 $’000 $’000 Net assets/(liabilities) 1,799 (4,049) Group’s share in net assets/(liabilities) – (2024:51% and 2023: 49.1%) 917 (2,108) Notional intangible assets 5,423 9,365 Group’s carrying amount of the investment 6,340 7,257 Income Statement Revenue 6,048 4,595 Net loss for the period (3,141) (1,356) Group’s share of loss for the period (1,583) (460) Amortisation of the notional intangible assets(i) 182 (813) Group’s total share of loss for the period (1,401) (1,273) (i) The current period amortisation of the notional intangible assets included a true up adjustment on opening balance of carrying amount of the investment of $0.6 million. After application of the equity method, the Group determines whether it is necessary to recognise an impairment loss on its investment in its associate. At each reporting date, the Group determines whether there is objective evidence that the investment in the associate is impaired. There has been no impairment loss in the current year. The financial statements of the associate are prepared for the same reporting period as the Group. The associate had no material contingent liabilities or capital commitments as at 30 June 2024. During the current period, the Group provided loan facility up to $3.0 million to Datarock which is to be repaid by September 2026. The loan is accounted as a financial asset measured at fair value through profit and loss and the balance of the loan receivable from Datarock is $1.0 million at the end of June 2024. The undrawn balance is $2.0 million at 30 June 2024. IMDEX LIMITED and its controlled entities OTHER ASSETS & LIABILITIES 107 4.8 Investment in associates (continued) Significant accounting estimates and assumptions The valuation of Krux and Datarock Options involves the use of judgements and estimates that include but are not limited to the estimation of future amounts payable as part of the acquisitions and future market value of these businesses. The amount payable is determined based on a revenue multiple applied to the prior 12 months revenue at the time of the acquisition. Management has assessed that the agreed revenue multiple is a market multiple and accordingly it has attributed no value to the Options. Judgement is required in determining whether IMDEX has significant influence or control of its investment in associates. In making this determination IMDEX examines key factors such as its ownership percentage, board structure and its ability to direct the decisions of the investment. 4.9 Assets classified as held for sale At 30 June 2023 the Group had taken the decision to pursue divestment options for the commercialisation of the MAGHAMMER technology which resulted in the major classes of assets associated with the MAGHAMMER technology being classified as held for sale. During the year, the Group continued to progress the divestment of MAGHAMMER however the intended sales did not occur. Growing uncertainty in global macro conditions plus increasing funding costs and inflationary pressures in the first half of the year saw interest levels to acquire the technology at this time decline from initial positive indications reflective of the technical merit of the technology earlier in the year. Acknowledging the conditions are not conducive to a sale at this time, the Group has recognised an impairment loss on the carrying value of the major classes of assets associated with the MAGHAMMER technology as outlined below: 2024 2023 $’000 $’000 Assets Intangible assets 6,970 6,970 Inventory 399 381 Impairment (7,369) - Total assets classified as held for sale - 7,351 IMDEX LIMITED and its controlled entities OTHER 108 5.1 Taxation 2024 2023 $’000 $’000 Income tax expense recognised in the income statement Tax expense comprises: Current tax expense 26,839 24,280 Deferred tax expense/(benefit) relating to the origination and reversal of temporary differences (5,001) (2,646) Losses brought to account from prior year - (56) Under/(over) relating to R&D credits (2,153) (1,365) Under/(over) provision in prior year income tax (1,951) (611) Total tax expense 17,734 19,602 Income tax expense recognised in equity Deferred tax expense/(benefit) relating to the origination and reversal of temporary differences (3,689) (1,354) Prima facie income tax expense on pre-tax accounting profit from continuing operations reconciles to income tax expense in the financial statements as follows: Profit before tax from continuing operations 50,133 54,597 Income tax expense calculated at 30% (i) 15,040 16,379 Tax losses not recognised or impaired 481 - Other deferred tax assets brought to account - (56) Derecognition of deferred tax assets - 63 Other non-deductible and non-assessable items 10,366 8,408 Tax rate differential arising from foreign entities (4,049) (3,216) Under/(over) relating to R&D credits (2,153) (1,365) Under/(over) provision in prior year income tax (1,951) (611) At the effective income tax rate of 35% (2023: 36%) 17,734 19,602 (i) The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by Australian corporate entities on taxable profits under Australian law. There has been no change in the corporate tax rate when compared with the previous reporting year. IMDEX LIMITED and its controlled entities OTHER 109 5.1 Taxation (continued) Recognised Current and Deferred Tax Balances 2024 2023 $’000 $’000 Current tax assets and liabilities Current tax receivable 4,915 6,981 Current tax payable (9,181) (8,916) Deferred tax balances Deferred tax assets comprise balances that relate to: Provisions(i) 7,694 6,161 Inventory(i) 4,776 4,803 Property, plant and equipment 13,323 10,674 Right of use assets (9,231) (6,579) Lease liabilities 11,555 8,519 Carry forward tax losses 687 1,474 Unrealised FX (612) (1,644) Intangible assets (25,487) (28,842) Others 16,644 10,315 Net deferred tax balances 19,349 4,881 Deferred tax assets(i) 44,837 34,410 Deferred tax liabilities (25,488) (29,529) Net deferred tax balances(i) 19,349 4,881 (i) The prior period amounts have been restated as a result of finalising the purchase price allocation for the Devico acquisition (refer to Note 5.2). 2024 2023 $’000 $’000 Unrecognised Deferred Tax Assets Deferred Tax Assets in respect of unrecognised tax losses 1,202 1,255 Current tax The tax currently payable is based on taxable profit for the period. Taxable profit differs from profit as reported in the income statement because of items of income or expense that are taxable or deductible in other periods and items that are never taxable or deductible. The Company and the Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period. Deferred tax Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries, except where the Company and the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. IMDEX LIMITED and its controlled entities OTHER ASSETS & LIABILITIES 110 5.1 Taxation (continued) Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company and the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company and the Group intends to settle its current tax assets and liabilities on a net basis. Current and deferred tax for the period Current and deferred tax are recognised as an expense or income in profit or loss, except when they relate to items that are recognised outside profit or loss (whether in other comprehensive income or directly in equity), in which case the tax is also recognised outside profit or loss, or where they arise from the initial accounting for a business combination. In the case of a business combination, the tax effect is included in the accounting for the business combination. Relevance of tax consolidation to the Group The Company and its wholly-owned Australian resident entities are an income tax consolidated group and are taxed as a single entity. IMDEX Limited is the head company of the Australian tax consolidated group. Tax expense/income, deferred tax liabilities and deferred tax assets arising from temporary differences in the members of the tax-consolidated group are recognised in the separate financial statements of the members of the tax-consolidated group using the ‘separate taxpayer within Group’ approach by reference to the carrying amounts in the separate financial statements of each entity and the tax values applying under tax consolidation. Current tax liabilities and assets and deferred tax assets arising from unused tax losses and relevant tax credits of the members of the tax-consolidated group are recognised by the Company (as head entity in the tax-consolidated group). Due to the existence of a tax funding arrangement between the entities in the tax-consolidated Group, amounts are recognised as payable to or receivable by the Company and each member of the Group in relation to tax amounts paid or payable between the parent entity and the other members of the tax consolidated Group in accordance with the arrangement. Significant accounting estimates and assumptions A net deferred tax asset of $19.3 million has been recognised on the face of the Consolidated Statement of Financial Position. The largest components of this asset are the future tax benefits available to the Group in respect of unused tax losses, identified intangible assets as a result of the acquisition and temporary differences between the recording of expenses for accounting purposes and the claiming of a deduction for the expense for taxation purposes. These tax benefits will be realised over the coming years when future taxable profits are available against which the unused tax losses can be utilised and as temporary differences move. This net asset has been raised as it is considered more likely than not that it will be realised due to trading and/or sale of assets. In making this assessment of likelihood, a forward-looking estimation of tax payments and the likelihood of business success needs to be made. A forward-looking estimation of this nature is inherently uncertain. As part of the process for preparing the Group’s financial statements, management is required to calculate income tax accruals. This process involves estimating the current tax exposures together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in the Consolidated Statement of Financial Position. While the Group aims to ensure the accruals for its tax liabilities are accurate, the process of agreeing tax liabilities with the relevant tax authorities can take time. Management estimate is therefore required in determining the provision for income tax and the recognition of deferred tax assets and liabilities and therefore the actual tax liabilities could differ from the amounts accrued. IMDEX LIMITED and its controlled entities OTHER 111 5.2 Acquisition of subsidiaries/assets Acquisition of Devico AS (Subsidiaries) On 28 February 2023 (Completion), the Group acquired 100 per cent of the issued share capital of Devico AS (“Devico”), incorporated and headquartered in Norway. Finalisation of the purchase price accounting was completed during the current period, resulting in retrospective changes to the provisional fair values presented in the 30 June 2023 Financial Report. Details of the revised net identifiable assets and goodwill are as follows: Final Provisional Change $’000 $’000 $’000 Consideration Cash 322,408 322,408 - Equity instruments 12,990 12,990 - Total consideration 335,398 335,398 - Fair value of net assets of business acquired Cash 17,113 17,113 - Trade and other receivables 13,666 13,666 - Inventory 9,393 10,563 (1,170) Tax receivables 834 979 (145) Other current assets 1,655 1,655 - Property, plant and equipment (“PPE”) 8,108 8,417 (309) Right-of-use assets 7,437 7,437 - Intangibles 97,200 97,200 - Deferred tax assets 2,873 2,278 595 Trade and other payables (7,236) (6,732) (504) Lease liabilities (7,437) (7,437) - Borrowings (8,814) (8,814) - Deferred tax liability (29,160) (29,160) - Provisions (1,050) (1,050) - Tax liabilities (8,122) (3,680) (4,442) Total fair value of net assets of business acquired 96,460 102,435 (5,975) Goodwill arising on acquisition 238,938 232,963 5,975 The finalisation of acquisition accounting resulted in a number of fair value adjustments completed during the measurement period, including the review of inventory provision, impairment on the PPE, retention bonus and review of the tax provision relating to potential historical tax risks in South America. The final acquisition fair values include an adjustment relating to a potential historical tax risks of $1.5 million in Canada identified subsequent to the issuance of the half year report. This has a corresponding impact to the goodwill. Critical accounting judgements and estimates Judgement is required in determining whether an intangible asset is identifiable and should be recorded separately from goodwill. Additionally, estimating the acquisition-date fair values of the identifiable assets acquired and liabilities assumed involves considerable judgment. The necessary measurements are based on information available on the acquisition date and are based on expectations and assumptions that have been deemed reasonably by management. Acquisition of MinePortal (Assets) In the prior period, the Group finalised an Asset Purchase Agreement (“APA”) to acquire the MinePortal software from Californian- based DataCloud International Inc (“DataCloud”). The total purchase consideration comprises a combination of cash and equity. The Group has paid $8.0 million in cash in September 2021 and issued 1,578,117 million of IMDEX Limited ordinary shares on each of the first and second anniversary of completion on 17 September 2022 and 17 September 2023. The balance of the transaction is payable by the issue of IMDEX shares, with an option to settle the payment by equivalent cash value based on the prevailing share price at the date of the third anniversary (at IMDEX’s discretion), as set out below: IMDEX LIMITED and its controlled entities OTHER 112 5.2 Acquisition of subsidiaries/assets (continued) • The issue of 2,104,156 million of IMDEX Limited ordinary shares upon the third anniversary of completion (“Tranche 3”). Tranche 3 is applicable if revenue from the DataCloud assets achieves the target agreed between the parties by the third anniversary of completion. If this revenue target is not achieved no shares will be issued in Tranche 3. During the current period, MinePortal software has been commercialised to visualise the data and Answer Products that are generated from the BLASTDOG solution. 5.3 Parent entity & subsidiary information The ultimate parent entity in the Group is IMDEX Limited, a company incorporated in Western Australia. The accounting policies of the parent entity, which have been applied in determining the financial information shown below, are the same as those applied in the consolidated financial statements. Financial Position 2024 2023 $’000 $’000 Assets Current Assets 56,709 25,340 Non-Current Assets 437,331 486,902 Total Assets 494,040 512,242 Liabilities Current Liabilities 41,524 38,736 Non-Current Liabilities 58,492 102,546 Total Liabilities 100,016 141,282 Net Assets 394,024 370,960 Equity Issued Capital 409,546 401,163 Reserves 19,425 16,087 Accumulated Losses (34,947) (46,290) Total Equity 394,024 370,960 Financial Performance 2024 2023 $’000 $’000 Profit for the year 29,723 18,377 Other comprehensive income, net of income tax - - Total comprehensive profit 29,723 18,377 Retained loss at the beginning of the financial year (46,290) (49,523) Profit for the year 29,723 18,377 Dividend paid (18,380) (15,144) Retained loss at the end of the financial year (34,947) (46,290) 30 June 2024 30 June 2023 $’000 $’000 Guarantee provided under the deed of cross guarantee 181,396 176,273 IMDEX LIMITED and its controlled entities OTHER 113 5.3 Parent entity & subsidiary information (continued) Subsidiaries Ownership Interest Country of 2024 2023 Notes Incorporation % % Parent Entity Imdex Limited (i)(ii)(iii) Australia Controlled Entities Australian Mud Company Pty Ltd (ii)(iii) Australia 100 100 Samchem Drilling Fluids & Chemicals (Pty) Ltd South Africa 100 100 Imdex International Pty Ltd (ii)(iii) Australia 100 100 Imdex Africa Pty Ltd (ii)(iii) Australia 100 100 Imdex Technologies Pty Ltd (ii)(iii) Australia 100 100 Imdex Global Operations Pty Ltd (ii)(iii) Australia 100 100 Reflex Instruments Asia Pacific Pty Ltd (ii)(iii) Australia 100 100 Imdex Canada Limited (previously “Reflex Instrument North America Ltd”) (viii) Canada 100 100 Reflex Instrument South America SPA (vii) Chile 100 100 Reflex Instruments Europe Ltd United Kingdom 100 100 AMC Europe GmbH Germany 100 100 Flexit Australia Pty Ltd (ii)(v) Australia - 100 Imdex South America S.A. Chile 100 100 AMC Chile S.A. (vii) Chile - 100 AMC Reflex Argentina S.A. Argentina 100 100 AMC Reflex Peru S.A.C. Peru 100 100 Imdex USA Inc United States of America 100 100 Imdex Technologies USA LLC United States of America 100 100 AMC USA LLC United States of America 100 100 Reflex USA LLC United States of America 100 100 Imdex DO Brasil Industria e Comercio Ltda Brazil 100 100 Imdex Global B.V. Netherlands 100 100 AMC Drilling Fluids & Products – Mexico S. de RL de C.V. Mexico Mexico 100 100 AMCREFLEX CIA LTDA Ecuador 100 100 Flexidrill Limited New Zealand 100 100 Flexidrill Construction Limited New Zealand 100 100 AusSpec International Limited New Zealand 100 100 Devico AS (iv) Norway 100 100 Devico Finland OY (iv) Finland 100 100 Devico Bulgaria EOOD (iv) Bulgaria 100 100 Devico Sweden AB (iv) Sweden 100 100 Devico International Operations AS (iv) Norway 100 100 Devico Mexico (iv) Mexico 100 100 Devico USA AS (iv) Norway 100 100 Devico Canada Inc (iv)(viii) Canada - 100 TECH Directional Services Inc (iv)(viii) Canada - 100 SurveyTech Instruments & Service Inc (iv)(viii) Canada - 100 Devico Australia Pty Ltd (iv)(vi) Australia - 100 DHS (Aust) Pty Ltd (ii)(iv) Australia 100 100 Devico Asia Company Limited (iv) China 100 100 Devico Chile (iv) Chile 100 100 STYRDCD SAC (iv) Peru 100 100 Styr Brazil Perfuracoes (iv) Brazil 100 100 DevicoEC. S.A. (iv) Ecuador 100 100 IMDEX LIMITED and its controlled entities OTHER 114 5.3 Parent entity & subsidiary information (continued) (i) IMDEX Limited is the ultimate parent company and is the head entity within the tax consolidated group. (ii) These companies are part of the Australian tax consolidated group. (iii) These wholly-owned subsidiaries entered into a deed of cross guarantee with Imdex Limited pursuant to ASIC Corporations (Wholly - owned Companies) Instrument 2016/785 and are relieved from the requirement to prepare and lodge an audited financial report. Australian Mud Company Pty Ltd became a party to the deed on 29 Jun 2006, Imdex International Pty Ltd on 20 Oct 2006, Reflex Instruments Asia Pacific Pty Ltd on 14 Sep 2007, Imdex Africa Pty Ltd on 15 June 2023, Imdex Technologies Pty Ltd on 15 June 2023 and Imdex Global Operations Pty Ltd on 15 June 2023. (iv) These entities were acquired on 28 February 2023. (v) This entity was deregistered on 10 July 2023. (vi) This entity was deregistered on 30 August 2023. (vii) These entities were merged to Reflex Instrument South America SPA on 1 December 2023. (viii) These entities were amalgamated to Imdex Canada Limited on 1 January 2024. The consolidated income statement of the entities which are party to the deed of cross guarantee are: Income Statement 2024 2023 $’000 $’000 Profit before income tax expense 3,772 7,037 Income tax benefit 8,509 2,500 Profit for the year 12,281 9,537 Retained loss at the beginning of the financial year (37,827) (32,220) Dividends paid (18,380) (15,144) Net profit 12,281 9,537 Retained loss at the end of the financial year (43,926) (37,827) IMDEX LIMITED and its controlled entities OTHER 115 5.3 Parent entity & subsidiary information (continued) The consolidated statement of financial position of the entities which are party to the deed of cross guarantee are: Balance Sheet 2024 2023 $’000 $’000 Current assets Cash and cash equivalents 18,919 19,682 Trade and other receivables 43,412 33,622 Inventories 27,072 29,490 Other 8,272 3,739 Total current assets 97,675 86,533 Non-current assets Other financial assets 412,586 430,224 Property, plant and equipment 14,135 9,220 Right-of-use assets 14,898 13,650 Other intangible assets 9,321 9,885 Deferred tax assets 19,439 7,927 Investment in an associate 6,341 7,257 Loans to associates 1,039 - Total non-current assets 477,759 478,163 Total assets 575,434 564,696 Current liabilities Trade and other payables 34,018 25,713 Lease liabilities 2,249 1,743 Current borrowings 28,000 28,000 Provisions 5,831 5,518 Total current liabilities 70,098 60,974 Non-current liabilities Other financial liabilities 36,953 2,172 Lease liabilities 19,839 17,786 Borrowings 54,138 95,048 Provisions 368 293 Total non-current liabilities 111,298 115,299 Total liabilities 181,396 176,273 Net assets 394,038 388,423 Equity Contributed capital 409,511 40,1128 Employee equity-settled benefits reserve 21,217 17,880 Foreign currency translation reserve 7,236 7,242 Accumulated loss (43,926) (37,827) Total equity 394,038 388,423 IMDEX LIMITED and its controlled entities OTHER 116 5.4 Reserves The individual financial statements of each group entity are presented in the currency of the primary economic environment in which the entity operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each entity are expressed in Australian dollars, which is the functional currency of IMDEX, and the presentation currency for the consolidated financial statements. In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences are recognised in profit or loss in the period in which they arise except for exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned or likely to occur, which form part of the net investment in a foreign operation, and which are recognised in the foreign currency translation reserve and recognised in profit or loss on disposal of the net investment. On consolidation, the assets and liabilities of the Group’s foreign operations are translated into Australian dollars at exchange rates prevailing on the balance sheet date. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are classified as equity and transferred to the Group’s translation reserve. Such exchange differences are recognised in profit or loss in the period in which the foreign operation is disposed. Goodwill and fair value adjustments arising on the acquisition of a foreign entity on or after the date of transition to A-IFRS are treated as assets and liabilities of the foreign entity and translated at exchange rates prevailing at the reporting date. Goodwill arising on acquisitions before the date of transition to A-IFRS is treated as an Australian dollar denominated asset. Equity-settled performance rights with employees and others providing similar services are measured at the fair value of the equity instrument at the grant date. Fair value is measured by the use of the Black-Scholes Model, Binomial Tree Method or Monte-Carlo Simulation as appropriate. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non- transferability, exercise restrictions, and behavioural considerations. The fair value determined at the grant date of the performance right is expensed over the vesting period, based on the Group’s estimate of shares that will eventually vest. At each reporting date, the Group revises its estimate of the number of performance rights expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss over the remaining vesting period, with a corresponding adjustment to the employee equity-settled benefits reserve. Performance Rights Plan At the Imdex Limited Annual General Meeting on 15 October 2009 the Shareholders approved the formation of a Performance Rights Plan (PRP or Plan) and subsequently renewed at the Annual General Meeting on 18 October 2012, 20 November 2015, 4 October 2018 and 7 October 2021. The Plan allows for the issue of performance rights to employees from time to time. The quantum of performance rights granted to employees is at the discretion of the Directors and is generally based on seniority and level of contribution to the strategic goals of IMDEX. A performance right is the right to receive one fully paid IMDEX ordinary share for nil consideration should set hurdles be achieved and tenure of employment be maintained. The hurdles are set by the Directors when performance rights are issued and are generally linked to the achievement of financial or other strategic goals of IMDEX. IMDEX LIMITED and its controlled entities OTHER 117 5.4 Reserves (continued) Performance rights granted in the current and prior year Item FY24 STI Award FY24 LTI Award FY24 Integration Award FY23 LTI Award FY23 STI Award FY23 Devico KMP Award FY22 LTI Award - Executives FY22 LTI Award - Employees FY22 STI CEO Award Exercise price Nil Nil Nil Nil Nil Nil Nil Nil Nil Number of rights granted 548,553 4,329,340 7,045,192 3,826,242 1,404,328 2,694,166 1,464,179 1,783,958 214,396 Grant date 01-Jul-23 28-Aug -23 1-Jul-23 15-Aug-22 01-Jul-22 28-Feb-23 12-Aug-21 16-Aug-21 25-Jun-21 Commencement of measurement period 01-Jul-23 01-Jul-23 1-Jul-23 01-Jul-22 01-Jul-22 28-Feb-23 01-Jul-21 01-Jul-21 12-Aug-21 Performance period (years) 2 3 3 3 2 3 3 3 3 Remaining performance period (years) 1 2 2 1 - 1.7 - - 1.12 Vesting date 1-July-25 1-Jul-26 1-Jul-26 1-Jul-25 1-July-24 28-Feb-26 1-Jul-24 1-Jul-24 11-Aug-24 Vesting conditions Note 2 Note 1 Note 5 Note 1 Note 2 Note 3 Note 1 Note 1 Note 4 Valuation per right at grant date $2.208 $1.109 $0.889 $1.528 $1.834 $2.254 $1.835 $2.185 $1.859 Estimated total cost $1,211,204 $4,013,298 $6,289,008 $4,941,113 $2,575,538 $6,072,649 $2,301,140 $3,361,200 $188,562 Current period cost $605,602 $1,295,293 $2,096,336 $1,371,614 $949,848 $2,027,910 $708,631 $765,126 $62,854 Note 1. 4,329,340 performance rights were issued to employees in September 2023 (3,826,242 were issued in 2022 and 3,248,137 were issued in 2021) (50% based on Relative TSR, 20% based on absolute EPS and 30% based on strategic measures). Upon successful achievement of the hurdles, allotment of these performance rights will occur in September 2026 (once the 2026 financial year independent audit report is signed). Exercise of the performance rights at the end of the 3-year period will commence when the Company’s performance (as calculated by the Performance Measures) is at 50% and above. At 50%, the allocation will be 50% of the total entitlement. This entitlement increases on a linear scale and achieves 100% entitlement when the Company’s performance is at the 75th percentile. The number of Relative TSR Rights and EPS Rights that vest is based on the Relative TSR performance against a peer group consisting of the ASX300 Resources Index and against absolute EPS performance over the 3-year measurement period. The Strategic Rights vest subject to growth in new businesses from transformational (non-core) revenue linked to the transformational (non-core) component of the research and development budget. Performance relating to the Strategic Rights is assessed by the Board of Imdex at the end of the performance period. Note 2. The Company provides an option for employees to defer a component of their STI award in exchange for the award of additional performance rights (STI Award). STI Awards for senior management will be deferred automatically (50% of the STI outcome). STI Awards vest over a 12-month period subject to continued employment with the Company. Note 3. The Company has issued management rights to key management personnel of Devico AS. The management rights are subject to the continuous employment with the Company for three years following completion of the acquisition, as well as achievement of agreed performance milestones. The current period cost is included in Devico integration costs (refer to Note 2.5 Individually Significant Items). Note 4. The CEO Rights vest subject to the continued service of the holder over three years from the date of issue of the CEO Rights. Note 5. 7,045,192 performance rights were issued to employees in July 2023 (67% based on performance criteria relating to IMDEX’s share price hurdle and 33% based on continued employment). Upon successful achievement of the hurdles, allotment of these performance rights will occur in September 2026 once the financial year independent audit report is signed. IMDEX LIMITED and its controlled entities OTHER 118 5.4 Reserves (continued) Outstanding Performance Rights 2024 Grant Date Expiry Date Exercise Price $ Estimated Number of Performance Rights Market value at grant date $ Opening balance Granted Satisfied by the allotment of shares Expired ^ Closing balance FY21 LTI Jul-20 Jul-23 - 1.047 3,033,265 - (1,769,719) (1,263,546) - FY22 LTI Aug-21 Jul-24 - 2.027 2,945,287 - - (127,470) 2,817,817 FY22 STI CEO Jun-21 Aug-24 - 1.859 214,396 - - - 214,396 FY23 LTI Aug-22 Jul-25 - 1.528 3,678,129 - - (250,901) 3,427,228 FY22 STI Jul-21 Jul-22 - 1.979 1,725,606 - (1,725,606) - - FY23 Devico KMP Feb-23 Feb-26 - 2.254 2,694,166 - - - 2,694,166 FY23 STI Jul-22 Jul-23 - 1.834 - 1,353,336 - (57,947) 1,295,389 FY24 LTI Oct-23 Jul-26 - 1.109 - 4,329,340 - (137,452) 4,191,888 FY24 Integration Jul-23 Jul-26 - 0.889 - 7,045,192 - - 7,045,192 2023 Grant Date Expiry Date Exercise Price $ Estimated Number of Performance Rights Market value at grant date $ Opening balance Granted Satisfied by the allotment of shares Expired ^ Closing balance FY20 LTI Jul-19 Jul-22 - 1.109 2,607,691 (1,773,545) (834,146) - FY20 MD LTI Oct-19 Jul-22 - 1.109 127,602 (127,602) - FY21 LTI Jul-20 Jul-23 - 1.047 3,153,582 (120,317) 3,033,265 FY22 LTI Aug-21 Jul-24 - 2.027 3,037,887 (92,600) 2,945,287 FY22 STI CEO Jun-21 Aug-24 - 1.859 214,396 - 214,396 FY23 LTI Aug-22 Jul-25 - 1.528 - 3,826,242 (148,113) 3,678,129 FY22 STI Jul-21 Jul-22 - 1.979 - 1,742,657 (17,051) 1,725,606 FY23 Devico KMP Feb-23 Feb-26 - 2.254 - 2,694,166 - 2,694,166 ^ - Performance rights expire either on failure to maintain employment tenure or on failure to satisfy performance hurdles. Significant accounting estimates and assumptions Share-based payments recorded for the performance rights are subject to estimation as they are calculated using the Black-Scholes option pricing, Binomial Tree Method or Monte-Carlo Simulation model, as appropriate, which is based on significant assumptions such as volatility, dividend yield, expected term and forfeiture rate. IMDEX LIMITED and its controlled entities OTHER 119 5.5 Contingent assets & liabilities There are no contingent liabilities or contingent assets at balance date, other than the legal proceedings and claims settled by the subsequent event disclosed in note 5.9. 5.6 Key management personnel compensation The aggregate compensation of the Key management personnel of the Group and the Company is set out below: 2024 2023 $ $ Short-term employee benefits 2,985,470 3,454,475 Post-employment benefits 137,500 137,500 Other long-term benefits 88,738 77,146 Share-based payments 2,208,970 833,649 5,420,678 4,502,770 5.7 Related party transactions Other than the loans provided to Krux and Datarock (refer to Note 4.8), there are no material transactions and balances with key management personnel and their related parties during the current period. 5.8 Auditor’s remuneration The auditor of IMDEX is Deloitte Touche Tohmatsu. During the year, the following fees were paid or were payable for services provided by the auditor of the parent entity and its related practices: 2024 2023 Notes $ $ Deloitte and related network firms Audit or review of the financial report - Group 689,644 562,960 - Subsidiaries 431,969 372,100 1,121,613 935,060 Other assurance and agreed-upon procedures under other legislation or contractual arrangements - 14,904 Other services: - Tax and corporate compliance services 3,100 3,896 - Legal services 9,717 3,151 - Other services (i) - 11,000 12,817 18,047 1,134,430 968,011 Other auditors and their related network firms Audit or review of the financial report - Subsidiaries 219,402 176,798 Other services: - Accounting and other services 6,773 3,444 6,773 3,444 226,175 180,242 (i) FY23: Accounting advice services. IMDEX LIMITED and its controlled entities OTHER 5.9 Subsequent events On 7 March 2024, Imdex announced it had received the benefit of a determination by the Federal Court in case NSD 1089/2016 where Globaltech Corporation Pty Ltd (Globaltech) was ordered to pay AU$7.96m (excluding legal costs) to IMDEX subsidiary, Australian Mud Company Pty Ltd. On 15 April 2024, Imdex announced that Globaltech had been placed into voluntary administration on 12 April 2024. As a result of the voluntary administration process, IMDEX entered into a deed of company administration (DOCA) with the Administrators on 31 July 2024. This DOCA was subsequently challenged by a number of Boart Longyear companies, with the court scheduling a hearing in mid-October to determine the outcome of the challenge. On 16 August 2024, the parties agreed to settle all of the global disputes and have entered into a binding settlement agreement which includes transfer of certain intellectual property to Imdex; new supply agreements between the parties; and a $10m payment to IMDEX. As a result, all global proceedings commenced by either party, including those in Canada, Australia and South Africa will be discontinued or brought to a final determination without any order for compensation and Boart Longyear will drop the challenge to, and agree to support, IMDEX’s DOCA for Globaltech. In addition to the above, and subject to IMDEX’s DOCA for Globaltech being finalised, all of Globaltech’s patents and trademarks will be incorporated as part of IMDEX’s intellectual property portfolio. Other than the events disclosed above, there have been no matters or circumstances that have arisen since the end of the financial year that have significantly affected, or may significantly affect, the operations of the Group, the result of these operations, or the state of affairs of the Group in future financial years. 120 Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Asia Pacific Limited and the Deloitte organisation. Dear Directors Auditor’s Independence Declaration to IMDEX Limited In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of IMDEX Limited. As lead audit partner for the audit of the financial report of IMDEX Limited for the year ended 30 June 2024, I declare that to the best of my knowledge and belief, there have been no contraventions of: the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and any applicable code of professional conduct in relation to the audit. Yours faithfully DELOITTE TOUCHE TOHMATSU Peter Rupp Partner Deloitte Touche Tohmatsu ABN 74 490 121 060 Tower 2 Brookfield Place 123 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia Tel: +61 8 9365 7000 Fax: +61 8 9365 7001 www.deloitte.com.au The Board of Directors IMDEX Limited 216 Balcatta Road Balcatta WA 6021 20 August 2024 121 Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Asia Pacific Limited and the Deloitte organisation. Report on the Audit of the Financial Report Opinion We have audited the financial report of IMDEX Limited (the “Company”) and its subsidiaries (the “Group”) which comprises the consolidated statement of financial position as at 30 June 2024, consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including material accounting policy information, and other explanatory information, the directors’ declaration on page 75 and the Consolidated Entity Disclosure Statement on pages 128 to 129. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: Giving a true and fair view of the Group’s financial position as at 30 June 2024 and of its financial performance for the year then ended; and Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report for the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Deloitte Touche Tohmatsu ABN 74 490 121 060 Tower 2 Brookfield Place 123 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia Tel: +61 8 9365 7000 Fax: +61 8 9365 7001 www.deloitte.com.au Independent Auditor’s Report to the Members of IMDEX Limited Key Audit Matter How the scope of our audit responded to the Key Audit Matter FinalisaƟon of the acquisiƟon of Devico AS As disclosed in Note 5.2 the acquisition of Devico AS (Devico) was completed during the prior year on 28 February 2023 for total purchase consideration of $335.4 million. The acquisition was provisionally accounted for as at 30 June 2023 and finalised during the current period ended 30 June 2024. As a result of the finalisation of the acquisition accounting the following balances were impacted with a resulting net increase in goodwill by $6.0 million to $238.9 million: • Increase in Tax liabiliƟes relaƟng to potenƟal historical tax risks in Canada and South America ($4.4 million) • ReducƟon in Inventory ($1.2 million) • ReducƟon in Property, Plant & Equipment ($0.3 million) • Increase in Trade and other payables ($0.5 million) • Increase in Deferred tax assets ($0.6 million) • ReducƟon in Tax receivables ($0.1 million) Significant judgement was required in assessing the appropriateness of the adjustments to the goodwill, including: • Concluding on the idenƟficaƟon and valuaƟon of the adjustments to the idenƟfiable assets acquired • Assessing the impact of the adjustments on associated tax balances • Reviewing the underlying assumpƟons and inputs used in the valuaƟon model Our procedures performed included, but were not limited to: • In conjuncƟon with our taxaƟon specialists, assessing the competence and experience of management’s experts and evaluaƟng the tax risks supporƟng the increase in tax liabiliƟes; • In conjuncƟon with our valuaƟon specialists, performing audit procedures to evaluate and challenge management’s adjustments to the final purchase price allocaƟon; • In conjuncƟon with our valuaƟon specialists, performing a review of the model supporƟng the value of the intangible assets acquired, including tesƟng the mechanical accuracy of the model; • Reviewing the documentaƟon supporƟng the remaining adjustments to and final determinaƟon of goodwill; and • Assessing the adequacy of the disclosures in notes 5.2. Other Information The directors are responsible for the other information. The other information comprises the information included in the Group’s annual report for the year ended 30 June 2024, but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors for the Financial Report The directors of the Company are responsible: For the preparation of the financial report in accordance with the Corporations Act 2001, including giving a true and fair view of the financial position and performance of the Group in accordance with Australian Accounting Standards; and For such internal control as the directors determine is necessary to enable the preparation of the financial report in accordance with the Corporations Act 2001, including giving a true and fair view of the financial position and performance of the Group, and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Auditor’s Responsibilities for the Audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Group’s audit. We remain solely responsible for our audit opinion. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in pages 58 to 74 of the Annual Report for the year ended 30 June 2024. In our opinion, the Remuneration Report of IMDEX Limited, for the year ended 30 June 2024, complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. DELOITTE TOUCHE TOHMATSU Peter Rupp Partner Chartered Accountants Perth, 20 August 2024 126 127 Body corporates Tax residency Entity name Entity type Country of incorporation % of share capital held Australian or foreign Foreign jurisdiction Imdex Limited Body corporate Australia N/A Australian(i) N/A Australian Mud Company Pty Ltd Body corporate Australia 100 Australian(i) N/A Samchem Drilling Fluids & Chemicals (Pty) Ltd Body corporate South Africa 100 Foreign South Africa Imdex International Pty Ltd Body corporate Australia 100 Australian(i) N/A Imdex Africa Pty Ltd Body corporate Australia 100 Australian(i) N/A Imdex Technologies Pty Ltd Body corporate Australia 100 Australian(i) N/A Imdex Global Operations Pty Ltd Body corporate Australia 100 Australian(i) N/A Reflex Instruments Asia Pacific Pty Ltd Body corporate Australia 100 Australian(i) N/A Imdex Canada Limited (previously “Reflex Instrument North America Ltd”) Body corporate Canada 100 Foreign Canada Reflex Instrument South America SPA Body corporate Chile 100 Foreign Chile Reflex Instruments Europe Ltd Body corporate United Kingdom 100 Foreign United Kingdom AMC Europe GmbH Body corporate Germany 100 Foreign Germany Imdex South America S.A. Body corporate Chile 100 Foreign Chile AMC Reflex Argentina S.A. Body corporate Argentina 100 Foreign Argentina AMC Reflex Peru S.A.C. Body corporate Peru 100 Foreign Peru Imdex USA Inc Body corporate United States of America 100 Foreign United States of America Imdex Technologies USA LLC Body corporate United States of America 100 Foreign United States of America AMC USA LLC Body corporate United States of America 100 Foreign United States of America Reflex USA LLC Body corporate United States of America 100 Foreign United States of America 128 Body corporates Tax residency Entity name Entity type Country of incorporation % of share capital held Australian or foreign Foreign jurisdiction Imdex DO Brasil Industria e Comercio Ltda Body corporate Brazil 100 Foreign Brazil Imdex Global B.V. Body corporate Netherlands 100 Foreign Netherlands AMC Drilling Fluids & Products – Mexico S. de RL de C.V. Mexico Body corporate Mexico 100 Foreign Mexico AMCREFLEX CIA LTDA Body corporate Ecuador 100 Foreign Ecuador Flexidrill Limited Body corporate New Zealand 100 Foreign New Zealand Flexidrill Construction Limited Body corporate New Zealand 100 Foreign New Zealand AusSpec International Limited Body corporate New Zealand 100 Foreign New Zealand Devico AS Body corporate Norway 100 Foreign Norway Devico Finland OY Body corporate Finland 100 Foreign Finland Devico Bulgaria EOOD Body corporate Bulgaria 100 Foreign Bulgaria Devico Sweden AB Body corporate Sweden 100 Foreign Sweden Devico International Operations AS Body corporate Norway 100 Foreign Norway Devico USA AS Body corporate Norway 100 Foreign Norway Devico Mexico Body corporate Mexico 100 Foreign Mexico DHS (Aust) Pty Ltd Body corporate Australia 100 Australia(i) N/A Devico Asia Company Limited Body corporate China 100 Foreign China Devico Chile Body corporate Chile 100 Foreign Chile STYRDCD SAC Body corporate Peru 100 Foreign Peru Styr Columbia Body corporate Columbia 100 Foreign Columbia Styr Brazil Perfuracoes Body corporate Brazil 100 Foreign Brazil DevicoEC. S.A. Body corporate Ecuador 100 Foreign Ecuador (i) This entity is part of a tax-consolidated group under Australian taxation law, for which Imdex Limited is the head entity. (ii) Imdex Limited Equity Plan Trust is registered in Australia and it is an employee share trust investing in shares of Imdex Limited on behalf of the participants in the Performance Rights Plan. 129 IMDEX Annual Report 2024 Corporate Information SHAREHOLDER INFORMATION IMDEX Annual Report 2024 Registered Company Name: IMDEX Limited ABN: 78 008 947 813 Exchange: Listed on the Australian Securities Exchange (ASX) ASX Code: IMD Listing Date: 24 September 1987 Registered Head Office: 216 Balcatta Road, Balcatta, Western Australia 6021 Registered PO Box: PO BOX 1262, Osborne Park, Western Australia 6916 Telephone: +61 (8) 9445 4010 Email: imdex@imdexlimited.com Web Address: www.imdex.com Bank Institutions: Commonwealth Bank of Australia Auditors: Deloitte Touche Tohmatsu Legal Advisors: Gilbert & Tobin Share Registry: Computershare 130 131 IMDEX Annual Report 2024 Top 20 Largest Shareholders as of 30 June 2024 Rank Name % ISC 1 L1 Capital Pty Ltd. 12.9% 2 Fidelity Management & Research Company LLC 6.8% 3 Yarra Funds Management Limited 5.0% 4 The Vanguard Group, Inc. 3.6% 5 Tribeca Investment Partners Pty Ltd. 3.2% 6 MFS Investment Management 2.7% 7 Celeste Funds Management Limited 2.4% 8 Spheria Asset Management Pty Limited 2.1% 9 State Street Global Advisors Australia Ltd. 2.0% 10 Cbus Super 1.9% 11 Regal Funds Management Pty. Ltd. 1.9% 12 DFA Australia Ltd. 1.8% 13 Norges Bank Investment Management (NBIM) 1.8% 14 Vanguard Investments Australia Ltd. 1.8% 15 BlackRock Institutional Trust Company, N.A. 1.7% 16 Pie Funds Management Limited 1.6% 17 Apis Capital Advisors LLC 1.6% 18 Ausbil Investment Management Limited 1.5% 19 Vinva Investment Management Limited 1.3% 20 Fidelity Institutional Asset Management 1.3% IMDEX Annual Report 2024 7/5/2024 Macquarie Australia Conference Presentation 2024 15/4/2024 Core Orientation Judgement Update - Globaltech into V.A. 20/3/2024 Change of Director's Interest Notice 20/3/2024 CFO Announcement 7/3/2024 Patented core orientation technology - Award of damages 29/2/2024 Initial Director's Interest Notice 29/2/2024 Director Appointment/Resignation 19/2/2024 IMDEX 1H FY24 Results Teleconference and Webcast Script 19/2/2024 Dividend/Distribution - IMD 19/2/2024 IMDEX 1H FY24 Results Presentation 19/2/2024 IMDEX 1H FY24 Results Announcement 19/2/2024 Half Yearly Report and Accounts 19/1/2024 1H24 Results Teleconference and Webcast Details 21/11/2023 Becoming a substantial holder 30/11/2023 Appendix 3B & CEO share activity update 13/11/2023 Director Appointment/Resignation 13/11/2023 Initial Director's Interest Notice 31/10/2023 Change of Director's Interest Notice 31/10/2023 CEO Trading Update 26/10/2023 Investor Webinar Presentation 24/10/2023 Final Director's Interest Notice Key Announcements IMDEX Annual Report 2024 132 IMDEX Annual Report 2024 19/10/2023 Results of Meeting 19/10/2023 2023 AGM and 1Q24 Update - Chairman and CEO Scripts 19/10/2023 2023 AGM and 1Q24 Update - Chairman and CEO Presentation 31/10/2023 Change of Director's Interest Notice 31/10/2023 CEO Trading Update 26/10/2023 Investor Webinar Presentation 24/10/2023 Final Director's Interest Notice 19/10/2023 Results of Meeting 19/10/2023 2023 AGM and 1Q24 Update - Chairman and CEO Scripts 19/10/2023 2023 AGM and 1Q24 Update - Chairman and CEO Presentation 18/9/2023 CEO Trading Update 15/9/2023 Ivan Gustavino to retire as a Non-Executive Director 6/9/2023 Change of Director's Interest Notice 31/8/2023 Details of Share Registry address 28/8/2023 FY23 Results Teleconference and Webcast Script 28/8/2023 Dividend/Distribution - IMD 28/8/2023 IMDEX FY23 Full Year Results Presentation 28/8/2023 Annual Report to shareholders 28/8/2023 IMDEX FY23 Results Announcement 28/8/2023 Appendix 4G and Corporate Governance Statement 28/8/2023 Preliminary Final Report 28/7/2023 FY23 Results Teleconference and Webcast Details 133 IMDEX Annual Report 2024 IMDEX Annual Report 2024 Annual General Meeting Share Registry Enquiries Corporate Calendar Our Annual General Meeting will be held on 17 October 2024, at 11:00 am (AWST) at IMDEX’s Head Office. Members of our Board and Executive Leadership Committee will be available to discuss the Company’s performance, operations, and technologies. Investors seeking information about their shareholdings should contact IMDEX’s share registry: Computershare can assist with queries on share transfers, dividend payments, the dividend reinvestment plan, notification of tax file numbers and changes of name, address or bank account details. Computershare Investor Services Pty Limited Address: Level 11, 172 St Georges Terrace Perth WA 6000 Postal address: GPO Box D182 Perth WA 6840 Telephone: 1300 558 507 (within Australia) +61 3 9415 4632 (outside Australia) Facsimile: +61 3 9473 2500 Email: web.queries@computershare.com.au 21 August 2024 Release of FY24 Full Year Results 21 – 28 August 2024 FY24 Full Year Results Road Show 17 October 2024 FY24 Annual General Meeting 1 November 2024 IMDEX Technology Deep Dive 31 December 2024 FY25 Half Year End 17 February 2025 Release of FY25 Half Year Results 17 - 22 February 2025 FY25 Half Year Results Road Show 30 June 2025 FY25 Year End 20 August 2025 Release of FY25 Full Results 20 - 27 August 2025 FY25 Full Year Results Road Show 134 IMDEX Annual Report 2024 135 IMDEX Annual Report 2024 Company History December 1980 Australian company Pilbara Gold NL incorporated July 1985 Pilbara Gold NL changed name to IMDEX Limited September 1987 IMDEX Limited listed on the ASX 1998 Formation of Australian Mud Company 1997 Acquisition of Surtron Technologies Pty Ltd and Ace Drilling Supplies 2001 Joint venture formed with IMDEX and Rashid Trading Establishment (RTE) in Saudi Arabia July 2005 Sale of IMDEX Minerals August 2005 Acquisition of African based company Samchem August 2006 Acquisition of Swedish based REFLEX Group of Companies and United Kingdom based company Chardec May 2007 Acquisition of Swedish based company Flexit July 2007 Ace merged with REFLEX. IMDEX finalised the sale of its interest in IMDEX Arabia to RTE Acquisition of Canadian based Poly-Drill and a 75% interest in Kazakhstan based Suay Energy Services October 2007 Sale of Surtron Technologies November 2007 Acquisition of Chilean based company Southernland January 2008 Acquisition of German based company System Entwicklungs July 2008 Acquisition of the remaining 25% of Kazakhstan based Suay Energy Services September 2008 Acquisition of Australian based company Wildcat Chemicals Australia July 2010 New regional structure implemented and business reporting streamlined into Minerals and Oil & Gas Divisions September 2010 Acquisition of Australian based companies Fluidstar and Ecospin March 2011 Acquisition of German based company Mud-Data July 2011 Formation of DHS Services joint venture Acquisition of Australian based company Australian Drilling Specialties Pty Ltd August 2011 Acquisition of Brazilian based company System Mud Indústria e Comércio Ltda January 2012 Acquisition of Vaughn Energy Services (VES) by IMDEX’s DHS Services joint venture November 2012 Acquisition of ioGlobal Pty Ltd, ioAnalytics Pty Ltd and ioGlobal Solutions Inc. (together ioGlobal) December 2012 DHS Services and Vaughn Energy Services rebranded as VES International September 2014 Acquisition of 2iC June 2015 Divestment of Suay Energy Services 2016 Divestment of AMC Oil & Gas January 2018 Option to acquire Flexidrill Limited and Flexidrill Construction Limited (together Flexidrill) January 2020 Completed acquisition of Flexidrill July 2020 Completed acquisition of AusSpec International September 2021 Completed acquisition of DataCloud International Inc. November 2021 Investment in Datarock Holdings Pty Ltd February 2023 Acquisition of Devico April 2023 40% interest in Krux Analytics January 2024 Increased investment in Datarock Holdings Pty Ltd to 51.9% IMDEX Annual Report 2024 IMDEX Annual Report 2024 IMDEX LOGRx™ 136 137 IMDEX Annual Report 2024 Forward Looking Statements This report may contain certain ‘forward-looking statements’ and projections provided by or on behalf of Imdex limited (IMDEX). Forward looking statements can generally be identified by the use of forward-looking words such as, ‘expect’, ‘anticipate’, ‘likely’, ‘intend’, ‘should’, ‘could’, ‘may’, ‘predict’, ‘plan’, ‘propose’, ‘will’, ‘believe’, ‘forecast’, ‘estimate’, ‘target’, ‘outlook’, ‘guidance’ and other similar expressions within the meaning of securities laws of applicable jurisdictions. These forward-looking statements reflect various assumptions made by or on behalf of IMDEX. You are cautioned not to place undue reliance on forward looking statements. The statements, opinions and estimates in this report are based on assumptions and contingencies subject to change without notice, as are statements about market and industry trends, projections, guidance, and estimates. The forward-looking statements contained in this report are not guarantees or predictions of future performance and involve known and unknown risks and uncertainties and other factors, many of which are beyond the control of IMDEX, and may involve significant elements of subjective judgement and assumptions as to future events which may or may not be correct. The forward looking statements are subject to significant business, economic and competitive uncertainties and contingencies associated with the mining-tech industry which may be beyond the control IMDEX, which could cause actual results or trends to differ materially, including but not limited to retention of key business relationships, environmental impacts and claims, operational and executional risks, research and development and intellectual property risks, an inability to meet customer demand, price and currency fluctuations, operating results, legislative, fiscal and regulatory developments, economic and financial market conditions in various countries, approvals and cost estimates, environmental risks, ability to meet funding requirements and share price volatility. Accordingly, there can be no assurance that such statements and projections will be realised. IMDEX makes no representations as to the accuracy or completeness of any such statement of projections or that any forecasts will be achieved. A number of important factors could cause actual results, achievements or performance to differ materially from the forward-looking statements, including the risks and uncertainties set out above. Investors should consider the forward- looking statements contained in this report in light of those matters. The forward-looking statements are based on information available to IMDEX as at the date of this report. Except as required by law or regulation (including the ASX listing rules), IMDEX undertakes no obligation to provide any additional or updated information whether as a result of new information, future events, or results or otherwise, indicators of, and guidance or outlook on, future earnings or financial position or performance are also forward- looking statements. imdex.com
Continue reading text version or see original annual report in PDF format above